Advice please to pay off 25,000 mortgage

squashabe

Hello can anyone please help? We are currently coming to the end of a fixed deal and the amount owed is £25,000. Can anyone recommend the cheapest way to pay this off, ideally in about 4 years, We can afford around £600/month. I see that Clydesdale have a rate of 3% for loans up to £25,000 but I'm not sure of the pitfalls of taking out a bank loan on a house. The £25,000 is what remains of a remortgage that we used on our own property to by another house. Our property is worth around £150, 000 and the house we bought is worth around £70,000.


Thanks


Adrian

AnotherJoe

What rate are you being offered on retention products with your current lender ?

squashabe

Hello and thanks for your reply. I'm not sure what you mean, but our fixed rate until September this year is 3.79% and there will be no penalty to switch mortgages after this.


Regards


Adrian

clairebeth

He means what mortgages does your current lender offer to existing borrowers such as yourself.

What are your reasons for wanting to take a loan instead of a mortgage? Why not a 3 year fix at one of the current low rates?

getmore4less

£25k over 4 years

7.116% £600pm
2.695% £550pm interest £1,400
0.000% £521pm interest £0

Find what rate your current lender will be offering you.
You will probably need the no fees options.

With your LTV you should be able to get under 2.7%

If you can find a rate under 1.728% with £600pm you will clear in 43 months and cost £800 in interest.

mrsammyp

If I were in your shoes, I would be looking at something like the following tracker mortgage without any fees or early repayment charges (and unlimited overpayments).

First Direct Life Tracker Repayment - Fee Saver
2.39%
£25,000 @ 60% LTV
4 years @ £539pm (Interest £1,241)
5 years @ £442pm (Interest £1,551)

AnotherJoe

A retention product is the range of mortgages your current lender will offer you without needing long drawn out checks. Tick a few boxes, job done. Have you asked or just looked on their website ?

squashabe

Thanks for all the replies. We are currently with the Nationwide and they have a 2 year tracker or fixed deal at 1.09% then 3.74% with fees of £999, or a 2 year fixed or tracker with no fees at 1.49% then 3.74%, The APRC is 3.2%
Regards

Adrian

getmore4less

ignore APR. meaningless on a mortgage product.

paying £600pm in 2 years you owe.
£25,000 @ 1.49% £11,148
£25,999 @ 1.09% £12,020

No fee is best.

squashabe

Thanks very much everyone for all your help, so it looks as though it's better to stay with Nationwide on a two year fixed deal and change again after two years.

Regards

Adrian

2357

I've just had a similar dilemma and went with the nationwide tracker at 1.49% no fee. Was on a fix before but the tracker gives me the option of unlimited overpayments which suited my circumstances more this time.
Also, not sure if you are aware but they offer £100 cash back as a loyalty offer for existing customers.
HSBC offered me the same rate but I stuck with nationwide to avoid wasting two hours going through the application process for a new lender.