Remortgage help: Pay early repayment or not ??

MRDOLLAR

Hi there,
I'm hoping you can help me.
Me and my wife are hoping to sort out our finances and the mortgage is top of the list !
We have seen many good mortgage deals on the market.
I wondered if I gave you our details could you help with free advice ?
We have a mortgage with nationwide a 4 year fixed rate 5.79% .
Monthly payments are £673 with this mortgage.
The current balance remaining is £124,366.
The value of our home on zoopla is £150,000.
Mortgage was taken out in October 2014 and is for 40 years ends October 2054.
37 years remaining !
The 4 year fixed deal obviously ends 31 October 2018. We could then pick and choose any mortgage deal on market.
Nationwide have told me we maybe able to move to another nationwide mortgage product on 01 July 2018 or if we did want to come out of mortgage deal now it would be an early repayment fee charge of £3,716.
Can anyone advise if it's worth paying this and moving to another mortgage now or simply wait ?
Thanks
MRDOLLAR

csgohan4

what interest rate products could you realistically get?


Compare the numbers and see if you can save


bare in mind solicitor and valuation fees to be paid potentially if moving to another lender

getmore4less

simplify

MRDOLLAR wrote: »

Oct 14, 4 year fixed rate 5.79% 40y term £673pm
balance now £124,366.
value £150,000.
fixed ends 31 October 2018.
early repayment fee charge of £3,716.

Oct 18 (18months) you owe
£124,366 @ 5.79% £673pm £122,998

Pay the ERC and get a fee free deal you need this or better over 18months

£128,082 @ 3.728% £673pm £122,998

X-check using difference in rate
£124,000 * (0.0579 - 0.03728 ) *1.5y = £3835
close enough to confirm the rate is about right as the real number is a bit lower on repayment.

can you get a no fee deal of 3.728% or better on LTV of 128/150 85%/90%

MRDOLLAR

Thanks for your reply looks like first direct have a no fee mortgage !
Will look into further and if anyone can offer any more advice I would appreciate it thanks

clairebeth

West Brom have 90% five year fix @ 2.79% with no fees (better than first direct) or Post Office have 3.14% with no fees and £1000 cash back. There are lots of good rates out there. Would you consider reducing the term while you're at it? The long term of your mortgage is what will cost you the most money in the long run. At current rates, you could reduce by 15 years and be paying a similar monthly payment?'

MRDOLLAR

More great advice thanks!
What's the best way of sorting early repayment fee as simply we haven't got that money anyway we can put on mortgage ?
Could we put this on mortgage and also a nationwide loan we took out a few years ago?
The loan is £11,000 and this paid for our double glazing and debt consolidation on credit cards.
Would be great to have all debts in one place !
We simply want a cheaper mortgage especially as we have a new arrival in the family our first child !
Your all superstars thanks for advice and keep them coming !
I'm not mortgage savvy as you can tell

clairebeth

You will probably be able to add the fees, the new mortgage could cover the total redemption fee, which includes the fees, but you would need to check the lender of course. The calculations above by getmore4less were based on aging the fees to the mortgage.

If you added the loan to the mortgage, it would make your ratio 95%, so fewer lenders and higher interest rates, probably not a great idea. Additionally, if it's a short term loan, and you add it to the mortgage and don't account for it by overpaying, you may end up paying more over the longer term than you would if you kept it short term. Just try and overpay the loan it whenever you can and get rid of it instead.

Congratulations on your impending arrival. I have just had my second and am on maternity leave. I am using maternity leave as an opportunity to cut costs and get into good habits, we did have a loan of £10,000 over 24 months such we paid off in 11 months before I started mat leave, it's a great feeling not to have that hanging around, and we have continued to put money aside while I'm off, it's amazing what you can save when your life changes so dramatically!

My only other word of caution is that we are also looking at ditching our fixed rate at the moment, but some lenders' criteria won't allow my income to be included because of the maternity leave, so we are waiting a few months until I am back at work.

Good luck!

clairebeth

Sorry for all my predictive text errors in that post!

MRDOLLAR

Is it possible to move my early repayment fee over to a new remortgage ?
E.g. First direct ?
I simply can't afford to pay out £3k in one go.
Hoping someone maybe able to advice as previous posts. Above thanks x

clairebeth

Yes, as per my first paragraph in my previous reply, you would need to check with First Direct, but probably, so long as adding the fees didn't increase your ltv ratio too much. They will want to know the total redemption figure, which will include the erc.