Fixed rate ending soon...

deejaybee

Hi all,


3 months to go on our Barclays 5 year fix ( 3.99)

Original loan was 137,999 over 17 year period.


We had a bit of a struggle getting sorted out with that one as i am self employed ( well pseudo S/E ) and myself and OH in our 50s ( hence the shortened term ) and we had been out the housing market for a few years..

Back in 2013 the wisdom seemed to be that rates would be going up, so went for 5 year fix, rather than 2, obviously rates hardly moved, but thems the breaks..


So onto the here and now ( as the weather ladies say )


Have a list of follow on rates on my Barclays online account now:


Those we are considering are :


3 year fix @ 1.99% ( no fee ) - £834.68


3 year fix @ 1.65% ( £899 ) - £818.02


2 year fix @ 1.91 ( no fee ) - £830.74


2 year fix @ 1.54 ( £899 ) - £812.68


and the wild card - 2 year tracker @ 1.60% ( base rate + 1.10 % )
( no fee ) - monthly = £815.59.


I assume the monthly payments are based on my current balance

( 108, 819 ) and they will be less in 3 months time, when my balance will be ( 106,583 ) according to MSE calculator.


My simplistic calculation is that the " NO FEE" products are better as i would be paying less over the fixed period, but i suspect there is more to it than that ?


And regarding the "wild card" tracker, it would be the law of sod, if i took that one and rates started increasing quickly, after i have sat on 3.99% for 5 years


any advice/input appreciated, Ta

Thrugelmir

Why no 5 year or longer fixes on your list. You may have missed the way down, but now the way is up. You've still a sizable balance to repay in the next 12 years.

deejaybee

Hi, cheers for reply.


The main reason for not considering the 5yr / 10yr terms is that we are in a top floor flat ( 2 floors below us ) apart from being a T2 diabetic myself, we are in decent health, but that can change quickly, so this is not our forever home.

Thrugelmir

Mortgages are portable to another property.

getmore4less

My simplistic calculation is that the " NO FEE" products are better as i would be paying less over the fixed period, but i suspect there is more to it than that ?

Lower rates pay off more of the mortgage even with a lower payment.


using £108,819 12y 3m I get

option rate fees payment add fees
1 1.54% £899 £812.76 £819.47
2 1.91% £000 £830.83 £830.83
3 1.65% £899 £818.10 £824.86
4 1.99% £000 £834.77 £834.77
payments look close enough

looking at the amount owing in 2 and 3y (if rates stay the same for the 2y in Y3) not adding fees.

amount owing 2 3
1 £92,423.75 £84,034.93
2 £92,743.73 £84,473.06
3 £92,519.27 £84,165.60
4 £92,812.43 £84,567.26

As you can see with the lower rate you owe less so need to account for that

take account of the fees by adding(could take them off the no fee) and see what's left

add fee 2 3
1 £93,187.30 £84,729.17
2 £92,743.73 £84,473.06
3 £93,283.61 £84,860.93
4 £92,812.43 £84,567.26


now make the payments the same so cash flow is equal for all 4 deals.

payment £835.00
1 £92,809.10 £84,157.46
2 £92,641.74 £84,318.58
3 £93,036.43 £84,487.07
4 £92,806.74 £84,558.63


2 years deal no fee is best
3 years deal the fee is the best

In three months the numbers will change as the smaller mortgage favours the no fee,

using your number £106,583 and 12y

option rate fees payment add fees
1 1.54% 899 £811.13 £817.97
2 1.91% 0 £828.81 £828.81
3 1.65% 899 £816.36 £823.24
4 1.99% 0 £832.66 £832.66

add fees payment the same

payment £833.00
1 £90,551.92 £81,889.45
2 £90,367.63 £82,024.87
3 £90,774.23 £82,211.44
4 £90,528.95 £82,259.32

reduced the fee/nofee difference on the 3y to £48.
very close needs real switch numbers when ready.

If you overpay then that needs to be factored in as well

As all the rates are lower than your current rate can you switch early?

if you look at the last set of numbers
at Y3 the 2y(no fee) is only £190 ahead of the 3y fix,

if we add in a 0.25% rise at year 2 for another 2y fix at Y3 you would owe £82,243.45 so now £30 behind.

again very close so real switch numbers at the time will be the decider on fee/no fee. along with your intentions to overpay.

deejaybee

Hi getmore4less,


Thank you for your comprehensive reply :beer:


Regarding if we can switch early without ERC, i dont know, i assumed not, will find out.


What do the figures look like for folowing 5 year fixes please ?


2.19% ( no fee ) - £844.58


1.93% ( 899 ) - £ 831.73


again the figures are based on current balance 108,819.




Also the ( no fee ) 2 yr tracker @ 1.60 % ( 815.59) but that only allows for maybe 1 or 2 0.25% rises, before its starts to look uncompetitive ?


Thanks

getmore4less

adding in the two 5y options


Mortgage £108,819.00
Full term 12 3

option rate fees payment add fees
1 1.54% 899 £812.76 £819.47
2 1.91% 0 £830.83 £830.83
3 1.65% 899 £818.10 £824.86
4 1.99% 0 £834.77 £834.77
5 1.93% 899 £831.81 £838.68
6 2.19% 0 £844.67 £844.67

amount owing 2 3 5
1 £92,423.75 £84,034.93 £66,864.95
2 £92,743.73 £84,473.06 £67,450.55
3 £92,519.27 £84,165.60 £67,039.31
4 £92,812.43 £84,567.26 £67,576.83
5 £92,760.92 £84,496.62 £67,482.13
6 £92,983.41 £84,801.92 £67,892.01

add fee 2 3 5
1 £93,187.30 £84,729.17 £67,417.35
2 £92,743.73 £84,473.06 £67,450.55
3 £93,283.61 £84,860.93 £67,593.15
4 £92,812.43 £84,567.26 £67,576.83
5 £93,527.26 £85,194.69 £68,039.63
6 £92,983.41 £84,801.92 £67,892.01

payment same £845.00
1 £92,565.53 £83,789.26 £65,826.28
2 £92,397.29 £83,948.37 £66,559.01
3 £92,792.59 £84,118.27 £66,334.57
4 £92,562.10 £84,187.99 £66,931.85
5 £93,372.82 £84,960.76 £67,642.07
6 £92,975.28 £84,789.60 £67,871.00

---

comparing the 2y tracker to the two 2y fixes with 6 month data points.

option rate fees payment add fees
1 1.54% 899 £812.76 £819.47
2 1.91% 0 £830.83 £830.83
3 1.60% 0 £815.67 £815.67

skipping to the add fees make payment the same amount owing at 6, 12, 18 24 month

payment same £831.00
1 £105,563.52 £101,376.95 £97,158.03 £92,906.53
2 £104,856.48 £100,855.97 £96,817.11 £92,739.51
3 £104,689.81 £100,527.48 £96,331.73 £92,102.31

tracker looks good if you think rates are stable.

adding two rises for the tracker 0.25% at 6m and 12m

rate rises 0.25% 0.25% 0.00%
3 £104,689.81 £100,656.67 £96,710.34 £92,722.39



exact timings will change the break even but 2 rises are are going to make this close at the 2 year point if they come in the first year

pushing out the rises to 12,18 months you could take 0.50% at 12m and another 0.25% at 18m
rate rises 0.00% 0.50% 0.25%
3 £104,689.81 £100,527.48 £96,579.78 £92,709.69

deejaybee

Thanks again !


I am a bit confused - which " amount owing" figure is the one i should concentrate on ? the " add fee" one or the "payment same " one ?


Thanks again

getmore4less

the ones with payment same include adding any fees,

that is the calculation that uses the same cash from your pocket and tells you what is left for the given rate.

remember the 2&3 ar based on the rate staying the same and no new fees beyond their first fixed term.

deejaybee

Just spoken to Barclays online advisor - the new rates would start when my current fixed rate ends, but i can reserve new rate from July 3rd.

dimbo61

Well you sat on 3.99% for 5 years and can now get a new deal of 2.19 % fixed for 5 years so nearly half your current interest rate.
Sign up in the morning unless you have a spare £900 to take the cheaper deal with a fee.
Ask to keep your mortgage payment the same as you are paying now
Job done
A Mortgage is a marathon not a sprint.
Overpay as much as you can each month provided you have no other expensive debts