2 part loan mortgage, merge or remortgage now?

Joepskwan

Hi MSE folks,

I have a 2 part loan mortgage, loan1 is due to end in april 18 and i can renew with current provider without any fees. The current rate im paying is 3.99%, when it ends it goes to 4.79% SVR. If i renew with current provider i could get 2.29% 5 yr fixed with no fees.

Loan 2 fixed does't end until Feb 19 but i was told by the provider i can start looking to switch in october 18. Current rate is 1.74%. Overall LTV for entire mortgage is 60%.

Is it better to wait until loan 2 can be renewed, then combine the 2 loans together into one? Which means i'll be paying SVR for a couple of months until they can be combined.

Bearing in mind i've read in the news that lenders are quite likely going to raise their rates!!

Would really appreciate advice and reasons why!

Thanks and happy money saving!

Joe

[Deleted User]

What sort of sums are we talking?

Rate are one thing, but it's the amount you're paying which is what matters.

getmore4less

How big is each bit?
What term?

What are the rates you can get with fees no fees.
(or give lender, they can be looked up)

Thrugelmir

Joepskwan wrote: »

If i renew with current provider i could get 2.29% 5 yr fixed with no fees.

When can you lock into this rate? Currently there's a view that the BOE may increase base rate sometime from May onwards.

Joepskwan

Hello folks,

Thanks for looking at my post!.

Loan1 term is 23 years for 30k. Loan2 term is 34 years for 92k.

For loan1 i can lock into the new rates right now if i wanted to.

Thanks!

Joe

Thrugelmir

Joepskwan wrote: »

For loan1 i can lock into the new rates right now if i wanted to.

At a time when interest rates seem destined to rise sooner rather than later. Personally I'd lock in now. 3.99% is a relative high rate to be paying. You could use the saving by switching product to overpay the mortgage and reduce your debt further.

getmore4less

Those numbers(£90k-£120k) a right in the fee/no fee range.

Gut say fix part one now and keep part two and hope for low rises in the interim.

If the lender does 2 and 3 year fix rates they may be an option to get a closer sync date in 3 years time.

Joepskwan

Thanks guys, i see your points. My mortgage advisor says otherwise though, she said to wait til loan2 and combine the two.

I wonder if the rates will be lower because the borrowed amount combined is higher?

Thrugelmir

Joepskwan wrote: »

I wonder if the rates will be lower because the borrowed amount combined is higher?

Not the way borrowing works. Though product fees are charged irrespective of loan size. This is a way of lenders targeting a given level of debt.

Best to make decisions on known facts at the time. In an era of rising interest rates. The downside far exceeds any potential upside. Make your own good fortune. Than leave it in the lap of the gods.