Coming to end of 2 year Fixed..

tizzle6560

I'm sure this has been covered a thousand times before so apologies if a bit like groundhog day.

Ideally am just after some advice or recs on any deals/plans that people have come across recently -

Coming to end of 2 year fixed with the Woolwich, rate was set at 3.75. Unsure as to whether to simply continue onto variable rate or find another 2,3,4 fixed rate.

Like most of you, I think its fair to say tha interest rates arent set to move up any time soon (fingers crossed an all that) but just interested to know what you lovely forum people would rec.

Thanks in advance!

Daniel_Sparkes

Hi Tizzle,

How much is your property worth and what is your approximate outstanding balance?

Daniel

tizzle6560

Daniel_Sparkes wrote: »

Hi Tizzle,

How much is your property worth and what is your approximate outstanding balance?

Daniel

Thanks Daniel.

Bought for £362k, now worth approx £450k (possibly more if you believe Rightmove pricing...). £325k left to pay on it

Daniel_Sparkes

To give you a bit of an idea, if you were looking for example to go back on to a fixed rate deal for the next 2 years, you're looking at a rate ranging from realistically 1.5% to 1.8%. As the LTV is under 75% there are plenty of lenders who would potentially lend subject to criteria and affordability acceptance.

When you take into account the potential costs of remortgaging such as lender arrangement fees, you'd need to weigh up what is the most financially beneficial option.

You may want to speak with a mortgage adviser as they can fully assess your situation, but on the face of it you may find remortgaging a suitable option. When the mortgage advisor assesses your case, you can set preferences such as no or capped lender arrangement fee and free valuation, but ultimately will provide you with a comparison between remortgaging and staying with your existing lender.

MortgageMamma

My thoughts on this are, if you are not intending to move from the property for the foreseeable to take a nice long fixed rate whilst rates are low, and then overpay your mortgage as much as you can to reduce the balance. Most lenders allow up to 10% per year. If you are remortgaging every couple of years you can be adding a lot of fees each time, thus reducing your capital balance more slowly, and its such a hassle to keep doing it over and over every 24 months. You also need to consider the impact of the EU referendum. If we do vote out there will almost certainly be a short to medium term economic impact. If we vote in we've already lost a lot of bargaining power so our economy will most likely be squeezed further. A longer fix gives you a little security , knowing what your payments will be medium term


If financial security isn't a concern, get someone to do the maths for you for a 2 year fixed vs a longer term fix in overall costs obviously it won't be truly like for like, as you've no idea what rates will be 24 months from now, but it may give you a bit of food for thought.

tizzle6560

MortgageMamma wrote: »

My thoughts on this are, if you are not intending to move from the property for the foreseeable to take a nice long fixed rate whilst rates are low, and then overpay your mortgage as much as you can to reduce the balance. Most lenders allow up to 10% per year. If you are remortgaging every couple of years you can be adding a lot of fees each time, thus reducing your capital balance more slowly, and its such a hassle to keep doing it over and over every 24 months. You also need to consider the impact of the EU referendum. If we do vote out there will almost certainly be a short to medium term economic impact. If we vote in we've already lost a lot of bargaining power so our economy will most likely be squeezed further. A longer fix gives you a little security , knowing what your payments will be medium term

If financial security isn't a concern, get someone to do the maths for you for a 2 year fixed vs a longer term fix in overall costs obviously it won't be truly like for like, as you've no idea what rates will be 24 months from now, but it may give you a bit of food for thought.

Thanks a lot and some very good advice indeed!

Boredatwrork

Hi Tizzie, I litereally signed up to this forum, just to help you, I can tell you are already grateful :beer:
This is the best thing you can do:

Call up your current provider, find out what your LTV is

The best deal I have seen FEE FREE) and great rates for a fixed are found here: Norwich and Peterborough Building Society

2 year fixes (they also do 3 and 5 years fee free too)

1.89% for a 65% LTV
1.94% for a 75% LTV
2.29% for a 85% LTV
2.74% for a 90% LTV

I signed up for them at the start of the year when rates where even lower and got a 2 year for 1.59%, the deal as I said here is the fact they are FEE FREE, I believe the only additional payment is £30 to the solicitors fee, which far out weighs the £1000+ fees for similar rates. So definately worth checking out.