To remortgage or not??????

liseloo79

Good morning folks :-)

Please can someone help me decide whether or not to remortgage. My current mortgage is split into 3 parts only one of which has an ERC. The ERC as of today is £2054.72.

The part with the ERC (Part 1) and the other main part (Part 2) are due to be paid in full in November 2029. The third part (Part 3) will be repaid in full in August 2019.

The interest rates are as follows:
Part 1 - 3.29%
Part 2 - 2.50%
Part 3 - 2.68%

Currently altogether i pay a total of £738.13 per month £25 of which is an over-payment on Part 3.

I can remortgage fee free to another company for a 1.75% 2 yr discount which would put my payments to £638

The reason I am debating is because the ERC is £2k then am I really better off as by remortgaging i am increasing the term of the third part of my mortgage and will therefore be paying more interest on it?

I would probably still pay £720 mortgage per month is I changed so I would be overpaying albeit only by £87 per month????

Thanks in advance

Lisa

Thrugelmir

When does the product term end on part 1. Surely not 2029.

liseloo79

Thanks for the reply the part one part is fixed until November 2016 and then it reverts to the standard rate.

getmore4less

Not enough info

What's the followon rate after the 2 years discount?

how big is each bit?

Any changes in the rate for each bit when and what's the followon rate.

what products does your current lender have.

enjoyyourshoes

Sounds like you need an Excel spreadsheet.


I did one last week on similar Q to yours and bracketed the options to clarify the best outcome.


Just make sure all the costs of re-mortgaging have been identified (banks have peculiar ways of finding ways to charge us !)


Factor in maximum overpayment you can make without incurring ERP on existing mtge and see what this does to your figures.

liseloo79

The amounts repayable as off today are :

Part 1 £53538.54 (which includes the ERC of £2054.72)

Part 2 £36324.20

Part 3 £4464.33

Nationwide's SVC is currently 3.99% which is what part 1 reverts to after Nov 2016

Part two and 3 are both on an older SVC of Nationwides and will stay one that (Part 2 is base rate plus 2% and part 3 base rate plus 2.18)

The new discounted rate would change to 4.99 fater the term but I would not be tied in and so would be free to move to a better deal.

Thrugelmir

When don't you direct your overpayments at part 1?

liseloo79

Just because its such a small amount and also part 3 finishes earliest so my initial thinking was to get rid of that part first and then is still had the same mortgage I would overpay part one with the full amount I was paying towards part 3

getmore4less

Juggling the numbers a bit the 25 OP is on the wrong bit.

if we go with current, payment, 2years

1. £51484 £383pm £45493
2. £36324 £257pm £31866
3. £4464 £100pm £2247
T. £92272 £740pm £79606

replace with

4. £94327 £740pm £79612.


This look marginal and you lose you base+2.5%. tracker.

getmore4less

You can ignore the terms on the bits, it is the payments that determine how long they last.

liseloo79

So am I correct in thinking i should just stay where I am and maybe pay the £25 from part 1 instead of part 3 which would make my monthly payment £395.99, part 2 is £247.47 and part 3 £94.67 (without overpayment) (Total £746.13) rather than moving to the new product of £638 per month but paying £725??

As if I moved I am looking at a mere £6 over the 2 year period? Plus in two years part3 is almost paid off and I can then use that against overpaying part 1?