Which deal is better

dprovan

Currently have two parts to my mortgage with alliance and Leicester (83,395 @0.99% above B.O.E. rate for life) + (£74,837.80 @ 4.74%) both 12.5 years remaining.

Santander have offered me the following on total £158,233.45:

a) 1.79% with £999 fee 2 years
b) 1.99% 2 years no fee
c) 2.49% 5 years no fee

I know there are better deals out there, but this is attractive in that it is approved without any further process.

Which of the above, if any are most attractive?

amnblog

Well, only a and b are comparable.

Do you even want to move the first tranche which is on a extionally low rate.

C is a 5 year rate, are you interested in that?

If not, the £999 fee is a cost 0.6% on your total lending over 2 years, or 0.3% a year - the margin between the rates is only 0.2% a year.

McDizzle

Hi Dprovan,

When you say attractive this can be quite subjective. For example some people are more than prepared to pay a little more to have the security of knowing that they have a fixed rate for 5 years instead of 2.

So I guess it depends what you mean by attractive. Are you just talking best value over the term of the product?

getmore4less

Seriously good tracker what's the best they can offer for the other bit.

dprovan

Thanks for the replys,

Yes you are correct, I do mean of a and b which is the best value over the 2 years. I would want to get another deal at the end of the 2 years.

I understand including C is confusing. I have it on the table so probably included it in case it was such an attractive offer for me to consider.

My circumstances are such that I am looking for a better deal than I currently have but don't feel the need to have the security of 5 years for instance.

Amnblog, I understand that the 0.99% above BOE is a good deal, but I can only keep that if I also keep the alliance and Leicester SVR of 4.74%.

My crude understanding is that I have one part of the mortgage which is very good and the other is terrible. As I need to keep both or change both I am working on the principal that I am better getting rid of the two. Does that make sense or have I got that wrong?

amnblog

Understand ref A&L, missed that.

Looks like you are paying 3% overall so not great.

Have you considered lenders other than Santander on a full re mortgage?

dprovan

I have amnblog, Our salaries are £55,000 and £29,000 and our mortgage balance is £158,233 with 12.5 years left.

We have savings of £31,000 and credit card balances of £35,000 so I thought the cc balances are likely to be a problem with other lenders whilst Santander have agreed in principal without any credit checks etc.

I know we could clear most of cc with savings but there are reasons we don't want to do that including the fact that all of it is on long term 0% deals.

Santander have offered me better deals 1.89% for 5 years (£999 product fee) if I pay £8,400 off mortgage. We could do that with savings as an option but my wife would prefer to keep the money in savings as kids go to university in couple of years....

amnblog

Is the property worth £200,000?

dprovan

Property is worth 240k to 250k

getmore4less

dprovan wrote: »

Santander have offered me better deals 1.89% for 5 years (£999 product fee) if I pay £8,400 off mortgage. We could do that with savings as an option but my wife would prefer to keep the money in savings as kids go to university in couple of years....

with net £5k debt you are going to be really dependent on cashflow and new 0% deals if knocking £8k off the mortgage for a better rate would cause problems.

each of those 0% deals come with a fee unless those are really low you are not getting really cheap money.

What about cheaper rate and extending term to lower payment to get over the hump of uni and saving that £5k debt.

<70% LTV are they the best deals on offer

have you done a proper 5 year budget based on the upcoming commitments to make sure you have enough cashflow and credit at cheap rates to cover these UNI costs and debt.

dprovan

Santander phoned me back this morning. I was ready to go with the 1.99 fixed for 2 years (no fee) when the advisor said so you are happy to switch both parts of your mortgage to that!!!!


I said I thought both or none had to change and she says no you can put both parts on to the lifetime tracker part because its the larger amount!!!!


So i now have the full balance of 158,233 on lifetime tracker 0.99% above BOE base rate, no fees!!!


They have just moved £74,837.80 from alliance and leicesters 4.74 SVR to a 0.99% above BOE base rate..... Interest rates would need to move a lot before i broke even....


Thanks everyone for your help....