Remortgage advice please

flashsnaps

Hi all,


Took out a mortgage with Nationwide August 2014 on a 2yr fixed at 4.1% on £204750 (property price £227,500 minus 10% deposit)


Just wondering if someone could offer advice on the below.


(1) Can I remortgage now or do I need to wait for my 2yr term to be up?


(2) Remortgage rates, Natwest are offering the below, 4.00% rate there after- does that mean if I keep it longer than 2yrs I would pay 4%? surely I would just remortgage with someone else for a better rate? Rather than pay 4%.


2.53% 2yr fixed initial rate
4.00% rate there after


(3) My original mortgage was 35years, I would like to reduce this to 25years, yes I would need to pay more pcm. Any problem with remortgaging to a reduced term?

Thrugelmir

1. There's more than likely an early redemption charge to exit your existing mortgage. This with the additional costs involved may make remortgaging to a new lender unviable.

So you'll need to factor the above into calculations.

If you can afford overpay your mortgage now do so. As this will save you money.

flashsnaps

"(2) Remortgage rates, Natwest are offering the below, 4.00% rate there after- does that mean if I keep it longer than 2yrs I would pay 4%? surely I would just remortgage with someone else for a better rate? Rather than pay 4%.


2.53% 2yr fixed initial rate
4.00% rate there after"

Can someone advise on this?

ScoobyZ

Hi put a note in you calender 3 months before the 2 year fixed is up. Then go to the mortgage calculator and click on the 'existing customers deal ending' this will show the rates available to you. You can switch without penalty before then and will not hit the standard mortgage rate (SMR) 4% rate. You cannormally remortgage over the phone.

Also they offer a kind of price promise for existing customer so have a look around a little before then to see if there is a better deal that they can match.

Best Mortgage Deals:
http://www.nationwide.co.uk/about/media-centre-and-specialist-areas/media-centre/press-releases/archive/2014/9/18-sept-best-mortgage-deals

flashsnaps

What I am trying to get at, after the initial 2yr period can you not jump to a different deal everytime rather than paying the "there after" interest rate?

Spangled

Yes, you could jump to a new rate when the two years is up (either a retention product with your current mortgage provider or a remortgage to a new provider) but would depend on some factors, including:

1 If your income or life circumstances have changed in the meantime then that may affect your ability to get a new deal (eg your OH loses their job or you have kids)
2 There could be fees involved with getting a new mortgage - booking fees, arrangement fees, legal fees etc - so if you're remortgaging every two years then you could be faced with such fees every two years, which wipes out any saving from a lower deal. Not *every* mortgage deal has such fees but a lot do. Sometimes it makes sense to pay a fee (especially on large mortgages), other times it doesn't - you need to crunch the numbers.
3 Who knows what rates will be like two years from now? They could be sky-high (unlikely IMO, but possible) in which case a longer-term fix could be a better option.

If you plan on staying in the property for a long time, a longer-term fix (say five years) may be the answer - you wouldn't be faced with such frequent fees for example. There are also lots of other options and variables to consider.

I would engage a broker to properly sort through your options, esp as you have your BTL properties to consider in your equations.

Thrugelmir

flashsnaps wrote: »

What I am trying to get at, after the initial 2yr period can you not jump to a different deal everytime rather than paying the "there after" interest rate?

Providing you meet your lenders criteria you can switch to any product on offer. As the mortgage balance reduces products with fees attached may not be so attractive however.