Mortgage in three parts - cheaper to combine?

mwddrwg

Hi, hoping that you wise people can give me a rough idea how best to proceed.


We've got a mortgage of around £130,000 in three chunks - one is £80k, the second is around £30k and the third around £20k. Each one is on the SVR of 4.74% at the moment and all have 30 years left to make it affordable.


Generally, would it be cheaper to combine all the loans into one and pay one load of interest? Logically (my logic!) I would think that it might be cheaper but can't seem to get my head around it! Hoping to get a fix as well but that might be asking too much.


Any advice appreciated. Thanks

ACG

Its not so much how the money is split that will dictate how much you pay - more the rate and term.

However, 4.74% seems on the high side. Assuming you are below 95% LTV or no major bad credit then I imagine you can get that rate down and combine them all in to one. I have clients with bad credit who are paying a lower rate than you are

getmore4less

Another thing to factor is setup costs and rates, £80k-£120k is in the window for the fee/no fee calculations where paying a fee gets a lower rate and is cheaper of the fixed term.

that usually means best to combine unless there is some compelling factor that means you are better keeping a part separate, an obvious one is a lump sum is coming and you want to avoid ERC in the short terms.

30 years for affordability suggest that massive overpayments are not on the cards so a combined lower rate is probably a good option.


Lender and LTV info will be able to do retention deal comparison to get you started.

mwddrwg

Thanks for all your advice. Our house is currently worth in the region of £180,000 so that's not too bad I suppose. Will speak to our lender soon to see what they say. Thanks again

mwddrwg

We're with Santander at the moment with a LTV of about 72%. The 5 year fixed offered by Nationwide looks good

dimbo61

So what deals have Santander got for existing customers ?
Have a look on there website.
With that LTV you should get a 5 year fix at close too 2% if not less.
You are paying far too much for your mortgage so get it sorted asap

mwddrwg

Quick update. Took your advice and talked to my lender.
Long story short - combined all loans into one and saved £170 per month on a 5-year fix! Thanks for the motiviation to take control