Remortgage advice - 2 or 5 year fix??

PennyK

Hi All,

Looking for some quick advice if anyone can offer as I am in a bit of a quandry regarding our remortgage. Our current mortgage deal ends on 1st Sept (I know I'm really late in dealing with this and really need to prioritise it htis week!).

Details as follows;
House value- c£300k
O/S debt - £155k (Virgin Money)
Moved 2 years ago and no plans to move anytime soon.

I am unsure what deal would be best.....

2yr fix @ 1.54% with Santander - no fees and free legals and valution.
5yr fix @1.99% with Santander - no fees and free legals and valuation.
5yr fix @ 1.69% with TSB & £995 fees

With the TSB mortgage would we need to incur the costs for the legal and valuation fees as there is no mention of this and if so roughly what would these costs be?

Lastly, I am in contact with a broker who will arrange the remortgage for us for a fee of £295. I am fairly confident that I could manage it myself to save on the broker fee but given the short time frame I wonder if I would be better going through a broker to help speed it up?

I was set on securing a 5 year fix given the current low rates but the broker suggested a 2 year on the assumption that rates won't change over this time and we could save on the arrangement fee. I'd be interested in other people's opinion on this.

Thanks in advance

getmore4less

Don't virgin have any retention products?

sevenhills

PennyK wrote: »

Lastly, I am in contact with a broker who will arrange the remortgage for us for a fee of £295. I am fairly confident that I could manage it myself to save on the broker fee but given the short time frame I wonder if I would be better going through a broker to help speed it up?

I was set on securing a 5 year fix given the current low rates but the broker suggested a 2 year on the assumption that rates won't change over this time and we could save on the arrangement fee. I'd be interested in other people's opinion on this.

If you get a 5 yr fix, the broker will not get the chance of a fee of £295 in 2 yrs time, perhaps that is why he favours a 2 yr fix?

PennyK

I had considered this sevenhills - if I were going through a broker I'd definitely be best going for the 5 year to get the longeity out of the fees.

Virgin retention deal is 5yr @ 1.79% with £995 fee....0.1% higher than TSB but have the benefit of speed of process given we are already customers.

sevenhills

PennyK wrote: »

I had considered this sevenhills - if I were going through a broker I'd definitely be best going for the 5 year to get the longeity out of the fees.

I personally havnt used a broker for my mortgage, because I feel that they can be biased. Perhaps it warrants it own thread?
A 0.5% difference can mean £800 difference on many mortgages over 2 years.

Toonsy

Also don't forget to factor in where rates may be in two years time and consider the potential instability maybe caused due to Brexit or a potential pending recession. Obviously this is all a matter of opinion but say if mortgage rates (not base rate) are at 4% or 3% youll have a cheap deal for two years then a more expensive one for another two so over the five year deal now you may be about the same overall but with more certainty. Again though personal preference.

I personally went with a five year deal for the certainty but any deal would be cheaper than my current one (NRAM SVR) so it's a no brainer for me. In the time I've got loans that will be paid off and cards that will be cleared so if I stick to my 'plan' I'll have enough savings to clear a decent chunk off my mortgage when my deal expires in 2022. Either that or I'll have a large buffer to smooth any potential shocks.

Anyway I was rambling there haha but defo think of the first paragraph.

PennyK

Thank you for the advice all. I had wondered if Brexit would impact interest rates...I suppose you just have to go with the gut feeling at the time.

I'm now considering a 2yr deal with Virgin at 1.39% with a £995 fee - it gives the lowest monthly repayment including the fee. I can then focus on overpayments and reassess it again in two years.

I can book a new deal with Virgin online which will be simple and fast and will save on broker fee and the inconvenience of a new application process.

Toonsy

This is it. The reality is I've not a scooby doo if Brexit will impact on rates or anything like that but my gut feeling tells me the chances are it will or that rates will rise for other reasons so I sought some security while I could.

The mitigating difference for me is my current mortgage was expensive anyway so whatever I did I stood to reduce payments by a good whack regardless