Remortgage

linuxpenguins

Hi

For those who have been following my progress and/or reading my posts, the time has now come to remortgage. Well, it will be come Thursday at 4.45pm!

Okay - I appreciate no one here can give me any advice, and to be fair, that is not what I seek. I am a person who tends to seek reassurance!

Currently with Nationwide and due to come to a 4.29% 5yr fixed term end.

I currently overpay by £65 and this makes my payment £500 a month. I also wish to continue paying this amount.

Okay - so.. the mortgage I have seen is another 5yr fixed term at a rate of 2.09% - wahoo :j a lot cheaper than my old rate! I've done some research and first direct have a mortgage of 1.94% for 5yrs. Both no fees apply.

I am happy with Nationwide and do not feel it is worth switching. Don't assume that it will make much difference over 5yrs - perhaps £200 cheaper with first direct. (Nationwide give me £250 loyalty reward anyhow!) so that offsets this in the grand scheme of things.

Is 2.09 a good rate? And 5yrs? Is this a good term to fix for?

What's brexit going to do to the interest rates? (Not that anyone knows but are rates likely to increase or decrease as a result) - and would 5yrs seen me ride this one out?

Appreciate tracker deals cheaper but offer uncertainty and to a novice, assume that rates are only going to increase

Happy to discuss! Hope I've given enough information!

Thanks for taking the time to read and comment!

linuxpenguins

Hope someone can help?

kingstreet

The important thing is what YOU will feel comfortable with?

I tend to avoid academic discussions about interest rate futures with clients when they tell me they want the certainty of payment for the longest possible period.

The alternative is short-term uncertainty. Could you accept that?

Whatever rate you decide on, chances are it is the lowest of its type in the last twenty years.

It's a bit like the question about the house on the North Pole. Whatever window you look out of, the window always faces south and the bear passing by is always going to be white, so rates are always going to be higher at some point in time.

This is how we word our suitability reports;-

You would like to achieve longer-term payment certainty from a five year fixed rate with no repayment overhang on a 30 year term and you understand the monthly cost of a shorter-term fix would have been lower

or

You would like to minimise your monthly payments and achieve the short-term payment certainty of a two year fixed rate mortgage with no repayment overhang, on a 30 year term

Ultimately, it is your decision we are documenting.

linuxpenguins

I prefer the certainty really

Thrugelmir

linuxpenguins wrote: »

I am happy with Nationwide and do not feel it is worth switching. Don't assume that it will make much difference over 5yrs - perhaps £200 cheaper with first direct. (Nationwide give me £250 loyalty reward anyhow!) so that offsets this in the grand scheme of things.

Is 2.09 a good rate? And 5yrs? Is this a good term to fix for?

To remortgage to a new lender is going to cost you far more than £200.

Lenders have to make a margin. In order to pay depositors interest and cover their own overheads, tax etc. So rates are more likely to edge upwards over time more than anything else. The reasons behind the source of cheap lending are very slowly fading away.

Ignore Brexit. Base the decision on your personal circumstances. What's best for you now. The one certainty in life is uncertainty. The unexpected is far more likely to throw you off course financially.

Jack_Johnson_the_acorn

Thrugelmir wrote: »

To remortgage to a new lender is going to cost you far more than £200.

Lenders have to make a margin. In order to pay depositors interest and cover their own overheads, tax etc. So rates are more likely to edge upwards over time more than anything else. The reasons behind the source of cheap lending are very slowly fading away.

Ignore Brexit. Base the decision on your personal circumstances. What's best for you now. The one certainty in life is uncertainty. The unexpected is far more likely to throw you off course financially.

Why do you say it will cost more than £200? Fee free remortgages tend to be fully free. Valuation, booking and arrangement fee all covered. What am I missing other than basic legal fees.

linuxpenguins

I thought as much too.

I don't think there is much in it within 5yrs. So probably easier to stay with Nationwide - Again, I could be wrong though!

Jack_Johnson_the_acorn

linuxpenguins wrote: »

I thought as much too.

I don't think there is much in it within 5yrs. So probably easier to stay with Nationwide - Again, I could be wrong though!

I would stick with Nationwide as you can complete the switch instantaneously online without having the hassle of a new application and valuation and waiting potentially months for it to go through.

linuxpenguins

Yeah - I'm thinking that too!

Plus

£250 loyalty reward will come in handy! :j