Looking to get a cheaper mortgage.

trollopscarletwoman

Going on from a previous question I'm currently on my lenders (Principality) SVR of 4.99% repayment.

Amount owed £18800 with 14 years to go. I'm not looking for any more money or changes to term (a little shorter if anything.) House value around £135000

I'm looking for a cheaper fixed deal.

Principality at the moment offers 5 year fixed at 3.1%, then standard variable with only charges being £99 mortgage commitment fee whatever that is.

I'm expecting this to be offered when I see them on thursday.

But I have noticed this mortgage from First Direct-

10 years fixed at 2.79% with £950 booking fee and £149 standard valuation fee. Then lenders standard rate.

A couple of questions please.

On the face of it which would appear the better deal?

I am looking for security from future rate rises and 4.99% in the current climate seems too much even at £156 per month.

I find the maths difficult to do.

Also can the £950 booking fee in the First Direct deal be added to the mortgage?

Thanks.

ps First direct payment comes in at £137 for 120 months.

Thrugelmir

You've legal fees and valuation fees to consider as well when remortgaging. So there's another £500 - £1000.

trollopscarletwoman

Thrugelmir wrote: »

You've legal fees and valuation fees to consider as well when remortgaging. So there's another £500 - £1000.

Thanks.

None.

There aren't any.

Happytravelling

Well, plugging in the figures on the principality mortgage (3.1% on £18800 for 14 years) into the mse mortgage calc gives a monthly payment of £138.

Doing the same with FD (2.79% on £18800 for 14 years) into the calc again gives a monthly payment of £135.

If you take the start balance, add 1/12 of the year's interest for the month, deduct the monthly payment and assume the sum of the figures gives the following month's start balance, and drag this out for the 5 years, I think over the 5 years, you'd be saving in the region of £250 in interest.

Who knows what will happen in 5 years time? I think everyone is expecting rates to go up but whether they'd go up sharply enough to make back the further c£750 in fees you pay is anyone's guess. If you're looking for security in the long term though, the 10 year fix would give you that and its hard to imagine rates being much lower than that, so its unlikely that you'll be feeling ripped off in 5 years time.

dimbo61

Could you afford to pay the mortgage off early ? Say 5 years !
Use " whatsthecost " website to work out the figures
With out knowing your income, age etc hard to guess if you can afford this.
Moving lenders with only £18,800 owing May work out expensive with exit fees.