Remortgage - stick with same lender?

edallen41

Hi,

My fianc! and I bought our house 15 months ago for £250000 with a 10% deposit. Our mortgage balance is now £218000 and we're on a Britannia discounted lifetime tracker paying 3.79% (for now at least). There are no early repayment charges and the exit fee is £30.

We've inherited £75000 and thought the best investment would be to put it into our mortgage - reducing payments on a 2 year fix, keeping duration the same (24 years left). We currently pay about £1150/month and would be able to afford this again, but with saving for wedding/honeymoon, it would be more useful for now to reduce mandatory costs for this 2 year fix, perhaps dropping the term of the mortgage quite a bit next time around.

I was wondering what people's thoughts were on switching to a new deal with the same provider vs. remortgaging with a different provider? I know the obvious answer is shop around, my concerns are mostly the hassle, but also the new affordability criteria. On paper, I don't see why this should be a concern - we are both doctors 3 years out of medical school with net earnings of £45000 each and despite some credit card debt, we are asking to dramatically drop our monthly mortgage repayments (which we've proven we can meet) and massively increase equity in the house (we would be able to get 60% LTV). That said, I know an upcoming wedding/honeymoon would be looked at unfavourably.

To top it off, Britannia seem to be offering fairly good deals - 2.19% 2 year fix with £999 fee or 2.69% 2 year fix with no fee (if we switch immediately at the end of the term, the latter seems overall cheaper).

What are people's thoughts? Is it worth going through all the hassle of remortgaging with someone else? Are we likely to get through things quickly and simply if we do? And am I right in thinking the admin side of things is significantly more straightforward (and deals nearly as good as best of market I've seen elsewhere) if we stick with Britannia on a new deal?

Many thanks for any help,

Ed

jellyfish76

Speak to your current lender first and then shop around.

Also I would pay off credit card and other debts first before putting the money on your mortgage.

Thrugelmir

Worth assessing your options given the wide spread of rates currently available in the market. As was said previously try Britannia first. As remortgaging isn't cost free. So headline rates aren't the only factor to consider.

edallen41

So I've spoken to Britannia who would be able to move us onto a 2 year fix at 2.19% for £999 (£16355 over 2 years) or 2.69% for £0 (£16200) in time for our 1st October payment with execution only.

I've also spoken to London and Country, who say that they would be able to get us a lower interest rate/fee combination, amounting to a saving of around £500 over 2 years, BUT they would be very unlikely to achieve this by 1st October, much more likely 1st November.

Considering we currently pay £1150/month and our payment would be dropping to ~£650/month, £500 would be 1 month's saving.

I'm kind of thinking that the quicker option (i.e. sticking with Britannia, execution-only) is likely to come out at least as cheap, if not cheaper, in the grand scheme of things, considering that remortgaging elsewhere would take a month (or more) longer to do.

Am I thinking sensibly? I'd really appreciate opinions here.

(For what it's worth, even the guy at London and Country was saying along the lines off "clearly I'm not going to turn away business, but in your case....")

Thanks in advance!

jellyfish76

You'd probably end up also paying an exit fee when you moved (around £200-300?) from Britannia to another lender so you should take that into account also.

edallen41

Actually only a £30 exit fee (waived if staying with Britannia), though I imagine other fees might build up (solicitor/valuation) with another lender

jellyfish76

true, my valuation fee was waived when I stayed with current lender but would have been £300 if I moved.

In the end there was potentially a £200 saving by moving and in the end I didn't feel it was worth it.