Do we change from fixed 5.99%?

getmore4less

Jon_B wrote: »

By the way, I'm no expert, but there are some great tools on MSE site if you take 5 seconds to look. I used the "compare two mortgages" tool

Shame they have not fixed it to do the numbers properly and highlight the true comparisons between loans

The MSE mortgage tools have to many flaws to be useful.

marathonic

You also need to factor in that, with HSBC, you'll be paying 1.99% in years 4 and 5. If you let your current mortgage run its term, do you think you could secure a 2-year fix at 1.99% in 3 years time?

Jon_B_2

getmore4less wrote: »

Shame they have not fixed it to do the numbers properly and highlight the true comparisons between loans

The MSE mortgage tools have to many flaws to be useful.

Interesting. What websites would you recommend to make comparisons etc?

Vic5

Thanks everyone. Appreciate your explanations; it's becoming a bit clearer now!

getmore4less

Jon_B wrote: »

Interesting. What websites would you recommend to make comparisons etc?

None,

learn to do it using a simple calculator,

it is very easy once you have the tool to do the mortgage bit.

The easiest way is add the fees and make the mortgage payments the same, then you just have to see how much you owe at the given point in the future.

Otherwise you have to start tracking things like the difference in payments and savings interest. In some cases you need to do this as the secondary calc when overpayments are an issue due to ERC.

it gets a bit more tedious if you have to do intermediate points for the likes of a rate change when doing what iffs.


There are 4 variable(debt, rate, payment, term) to a mortgage and you only need 3 of them to do the calculations.


BE careful of those that guess or just use things like the difference in payments, they are often wrong.

Thrugelmir

gazter wrote: »

And hsbc have some of the tightest lending criteria out there. That credit history needs to be squeaky clean...

More importantly they are selective when it come to customers, i.e. annual income. HSBC have always been conservative lenders. Maintaining high standards of underwriting even during the credit boom. HSBC are not in the market for share just sensible lending to quality customers.

andyfromotley

i'm unclear if the op intends to keep payments the same or pocket the savings.

getmore4less

andyfromotley wrote: »

i'm unclear if the op intends to keep payments the same or pocket the savings.

That changes the calcs a bit.

You still add the fees but then aim to make the end point the same.

For the key date 3 years left on the current fix.

this changes the previous calculation

Add the fees make the payment the same and see how much you owe in 3 years.

http://www.whatsthecost.com/mortgage.aspx

£132k 21 years 5.99% is around £922pm.

lets go for £920pm

£132000 5.99% £920pm in three years £121730
£138860 1.99% £920pm in three years £113295

in 3 years £8400 better off even adding the fees.

To,
Add the fees make the end point the same

http://www.whatsthecost.com/mortgage.aspx
(set to interest only once you know your payment, and make the term your target date, or use details)

£132k 21 years 5.99% is around £922pm.

lets go for £920pm

£132000 5.99% £920pm in three years £121730
in the calculator play with the payment till the money left is the same(ish)
£138860 1.99% £693pm in three years £121709

£227pm to save or spend, £8172 over three years.

(Do a sanity check does £227pm saved @ 1.99% get to around £8400 in 3 years? yes)

getmore4less

Don't get hung up on the lending criteria of HSBC the numbers stack with higher rates so there is likley to be a lender out there.

getmore4less

marathonic wrote: »

You also need to factor in that, with HSBC, you'll be paying 1.99% in years 4 and 5. If you let your current mortgage run its term, do you think you could secure a 2-year fix at 1.99% in 3 years time?

I forgot to cover this point.

At Y3

£132000 5.99% £920pm in three years £121730
£138860 1.99% £920pm in three years £113295

in 3 years £8400 better off even adding the fees

The new deal at Y5 paying the same £920pm will be £95386

(£121730-£95386)/24 = £1097

A no fee follow on would have to be at a rate of less than ZERO.(-1.96%)