Remortgaging tips

Mattygolf73

My property is valued at £300k and i have 2 mortgages with Barclays, the fixed rate on one of them ends this month and is 2.4% the other ends in April 2017 and is 5.4%, the balance currently for both is £87k so our equity is good, is it best to let the one revert back to a tracker until the other fixed rate ends and then look to streamline into 1 mortgage rather than 2 or fix now and then fix again in April on the other one?

MortgageMamma

It all comes down the the numbers and if there are savings to be made.


2 mortgages normally means 2 lots of arrangement fees when you come to switch products. If you select a product with no arrangement fee the rate will be higher, so the maths would need to be done on that one and as we don't know what products or rates will be available in April 2017 there is no way to say for sure if you would save by having 2 separate mortgages.

Secondly, I would bet that there are early repayment charges on the second mortgage product that you would incur should you try to remortgage that portion now.


The key to this is to deducts the savings you would make combining both mortgages from the early repayment charges that would trigger should you move mortgage 2. You also have to factor in that one arrangement fee would be cheaper than 2 potential arrangement fees.


5.4% is a lot higher than the 2% products available today.


Hope that helps


MM

Mattygolf73

thanks for the info

getmore4less

What rates do both bits revert to?

If Barclays won't let you combine now then the two stay with Barclays options can be worked through.

then those compared to a new lender with any exit charges now and in April.


Looking at Barclays "2" year retention rates you have 1.32%(£999fee) 1.78%(£0 fee)

These are til 31st Dec 2018(a broker should now how Barclays does there fix deal timescales it may be that with 2 more fixes you can get the merge date closer..

The break even point for that rate over 2 years is going to be between the £87k and the combined total.


The stay scenario are most likely, 2 no fee fixes against a wait and a fee fix. Not forgetting to use the savings by fixing the first bit now to overpay the more expensive bit.

More details on the actual payment,term rates etc. it will be possible to crunch some numbers on an example.