Switching mortgages? Advice please.

[Deleted User]

Hi All

I am in the process of switching mortgages (to get a better rate) and wonder if I can run this by the more experienced amongst you for your feedback/advice.

I owe £48,660, have 8 years 8 months left on the mortgage, and am currently on my lenders SVR (7.84% if I remember correctly). I have been offered a tracker (through another lender) for the term of the mortgage 0.17% above the bank base rate making it 5.92% (I don’t think I am going to go for another fixed rate with only 8 years left on the mortgage). Total cost of swapping mortgages will be about £475 but I will receive £200 cash back on completion. The monthly payments will be approximately £11 less than I am paying now but we are reducing the mortgage to 8 years. At £11 less a month, I have worked out it will take approx 2 years to recover the cost of switching but, of course, the mortgage is being reduced by 8 months too.

I am tempted to go ahead with this offer but do you think the sums add up?

Best regards, Paul

WildHaggis

Have you asked your existing lender what they can do? If you tell them you are shopping around, they will probably just sharpen thier pencil, and you can save the costs of switching.

[Deleted User]

WildHaggis wrote: »

Have you asked your existing lender what they can do? If you tell them you are shopping around, they will probably just sharpen thier pencil, and you can save the costs of switching.

Hi, thank you for taking the time to reply. Yes, I have approached my current lender and although they have offered an improved deal on what I am currently on, its still not as good as the other lenders. Plus, they also want £75 for moving me onto a better deal.

Regards, Paul

lynnexxxo

Hi

If you are saving £11 per month then £11 X 96 (months in 8 years) = £1056 - the arrangement fee (£275) = £781 saved AND 8 months less payments by switching to the new lender.

Make sure you don't have to pay for a valuation or solictors fees for remortgaging though, or your saving may be wiped out.

[Deleted User]

lynnexxxo wrote: »

Hi

If you are saving £11 per month then £11 X 96 (months in 8 years) = £1056 - the arrangement fee (£275) = £781 saved AND 8 months less payments by switching to the new lender.

Make sure you don't have to pay for a valuation or solicitors fees for re mortgaging though, or your saving may be wiped out.

Thank you for your reply. I hadn't worked it out that way i.e. £11 X 96 = £1056 - the arrangement fee (£275) = £781! It makes it look even better :j Free valuation and the solicitors fees are included in the total.

Regards, Paul