Re Mortgage Help

teacup_2

Hi could I ask some advice I currntly have a mortgage of £47,000.00 / property value £270,000(mortgage term 19 years ). My mortgage is a straight repayment mortgage . I am on a discounted(rate of 1.25% till 2009 variable(6.35%) rate until 02/02/2009
With this mortgage is goes down very slowly and I didnt realize i had tied my self in to the rate till 2009. I would like to overpay some months but you cant on this one , what would it entail to switch my mortgate to another provider , how much would it cost. I am with Abbey or should I reduce the mortgage term and increase the payments this way ?would they allow me to do this . I know I must speak to someone but thought I would ask you wise ones first. In the end I guess I would like to reduce term and pay of earlier.if possible.
Many thanks i have only ever had a straight repayment mortgage

current repayments £373.00 a month

ps if I did change my mortgage what would you recommend for this loan amount ??

superged

I am a broker Our Firm No is 454111 - Just so you know we are!

Firstly if you have a mortgage with Abbey they normally allow overpayment of upto 10% in a year, its worth checking whether they will allow this in your case.

Secondly Abbey are a strange lender in that the longer you are with them the more they charge as a penalty - they make you repay the discount you have had. So the longer you have left on your tie, normally the cheaper it will be to pay off. You will need to look at your original mortgage offer to check this amount.

I would need to know more about your circumstance before suggesting a product as "The Best Mortgage" is the one that is right for you and your circumstances - also whether you could justify the redemption fee when chances are you can overpay anyway!


Ged

SantanderAbbey

All abbey mortgages with Tie's allow for 10% overpayments, Discounted rate penalties do rise with time.

If you pass the 10% overpayments per year you also have the opportunity to reduce the term and push the monthly payments up, so that you can clear the amount quicker.

angelavdavis

Some lenders allow you to change the term to shorten it without penalty, so it might be worth asking them?

teacup_2

Many thanks for your replys after receiving them I rang abbey and spoke to them the minumum overpayment I can make is £500.00 - to £4000.00 in one calendar year. To leave abbey(redemption penalty ) I would have to pay £1000 and over couldnt remember exact figure and she mentioned something about £48.00 a day !.
So it seems that any savings I would ake with another lender are swallowed up with this fee, unless any banks / building societys pay for this????(its rather a lot , so I dont know the answer to that myself?!.
They would allow me to reduce term which I guess reduces intrest i overall pay back. I guess I was looking for a safe mortgage risk free with the guarantee it would be paid back at the end of term, with a chance to pay extra when and where I could, depending on circumstances with a term of 15 years or less. Unless their is any quicker way to pay mortgage off a miracle mortgage !!!!!
Any more information would be greatly appreciated many thanks

Floxxie

Why not increase your monthly direct debit? You would still have the 10% overpay each year if you wanted to and would be reducing the amount you owe. This is what I have done with Abbey and it was them that suggested it. It just required a letter from myself stating how much I wanted the DD to be.

Call Abbey and have a chat.

F

teacup_2

Hi Floxxie
Do you mean changee the direct debit amount by decreasing the mortgage term or would they just allow you to increase to what you want it to be in a direct debit ?. Many many thanks

firesidemaid

did they say by how much you could reduce the term - with no charges?

you can then make the amount/years whatever you are happy with.

teacup_2

I asked about reducing it to 15 years and their is no charge it made payments about £40.00 more a month, i am very interested what floxxie is saying about reducing term but keeping direct debit the same ( I think thats what she means). every month that would be great. If I am reading it right !!I do get a little confused sometimes. I didnt ask any lower than 15 years though.
x

I was confused how you could keep payment the same everymonth and reduce the term of mortgage at the same time, I dont understand how that works??
x

firesidemaid

to reduce the term of your mortgage would mean increasing your payments - but the quicker you pay it off the less interest you pay.

google 'channel 4 mortgage calculator' and try it for yourself!

it depends on how much you want to pay it off and how flexible (or not) you need it to be.

reducing your term costs more per month (eg. we went from 28 to 17 years and increased monthly payments by 150) - but we also make extra payments on top (up to 10% a year).

if you want it to be more flexible, save up £500 and then make an overpayment. or do a combination of the two.

have a look also at some of the other threads on this board too!

let us know what you decide to do x

teacup_2

hi sazzacat,
I understand,, i was getting confused thinking I could keep my direct debit amount the same and reduce the term ! silly mare I am. I wish the abbey mortgage would let you pay off any amount up to £500.00 say ie £100.00 as then when you got money you could pay it off opposed to waiting till you have £500 or over when you could get tempted or you have to spend it on something else that pops up. I see some people can pay smaller amounts. This mortgage would be ideal if you could pay off in smaller amounts. But I guess its down to their admin. I think I would change mortgage but with the over £1000.00 redemption penalty that stops me , and I do not think any bank or building society would want to pay that to get my custom.?

Thanks sazzacat X