Moving to variable rate

jimbo1986

Hi, after some advice as our 3 year fixed mortgage is coming to an end.

It expires on 1st Jan, and we are looking to move fairly soon. We are glad that our early repayment charge of £5K will be avoided if we can wait until Jan /Feb to move.

Are we best off sticking to Virgin's automatic variable rate and paying the hiked rate? Or, is there a better/cheaper alternative for this short period between the end of our fixed period and moving and arranging our new hefty mortgage?

Lotak

jimbo1986 wrote: »

Hi, after some advice as our 3 year fixed mortgage is coming to an end.

It expires on 1st Jan, and we are looking to move fairly soon. We are glad that our early repayment charge of £5K will be avoided if we can wait until Jan /Feb to move.

Are we best off sticking to Virgin's automatic variable rate and paying the hiked rate? Or, is there a better/cheaper alternative for this short period between the end of our fixed period and moving and arranging our new hefty mortgage?

Most lenders won't allow you to port a mortgage within the first 3 or 6 months of having it. Best off asking a broker if there are lenders out there that will allow you to port within a couple of months of remortgaging. Not sure if that'll happen.

Otherwise, it's best to stay with Virgin and switch lenders when you move house.

MortgageAdviserTorquay

Its best to speak to a mortgage broker, who will work out if its best to port the mortgage or pay the penalty as some rates are very attractive, compared to previous rates.
You could also look to do a product switch with no tie in until your out of the penalty

jimbo1986

Thanks for the replies so far. I don't know much about porting, but it seems a hassle, so a short term product as a stop gap looks promising.

It seems the market is a little slow near us and to be honest we haven't seen many properties we like the look of.

For this reason we have not yet put our house on the market, and I realise Christmas is perhaps not an ideal to go to market. Our fixed period ends at the end of the tear and the rate will jump from 1.99% to the SVR of 4.79%.

I am hoping we will list in the new year perhaps Feb, Mar and sell June time.

It seems silly to stick with the high SVR for this period of 6 months, so I am shopping around for something to tide us over until the move.

From what I understand a product with small fees upfront, small exit fees and also a low early repayment charge so we wont have to port to our new property are my main concerns.

In the mean time I could also reduce the mortgage term, (we can afford it) to repay a bit more, (or on second thoughts if there are no early repayment fees, we could just overpay monthly as and when to suit).

I have found the deal below. I would be very grateful to hear your thoughts on this! Sorry for the rambling, I really want to get this right and save a few pennies. Happy to provide our property details (LTV etc) if useful:

Nationwide Rem 2 yr tracker
1.84% for 24 months
Set up fee £20
Cashback offer of £200
Overpayments allowed, Charge N/A
Exit fee £65

Thrugelmir

What's the concern over porting? As is simply the transfer of the existing product terms and conditions. What ever you choose to do you'll need to go through the entire application process.

At least ascertain what your existing lender will offer. In order to make a reasoned judgement.

Remortgaging now is going to cost you money as well. Mortgage exit fee, valuation fees, legals fees etc. Money that you could spend paying down your existing mortgage.

jimbo1986

Thanks Thrugelmir

I hadn't considered porting as our loan amount will be jumping up significantly. Perhaps i assumed incorrectly. I like the idea of negotiating a new deal on our next home.

The offers I have seen (as per my previous post) include a small exit fee, free legal fees, so seemingly little to lose on this front.

Thrugelmir

jimbo1986 wrote: »

I like the idea of negotiating a new deal on our next home.

There's no negotiation. Advertised rates are what you'll be offered if you meet the lenders criteria.

jimbo1986

When I write negotiate I refer to length of mortgage, fixed period, etc.

Any thoughts on the 2 year tracker offer from Nationwide as an interim solution?

Nationwide Rem 2 yr tracker
1.84% for 24 months
Set up fee £20
Cashback offer of £200
Overpayments allowed, Charge N/A
Exit fee £65

jimbo1986

Anyone able to comment if this is a hair-brain scheme to switch mortgages from SVR to the above for a short time period of say 6 months max?!

AnotherJoe

jimbo1986 wrote: »

In the mean time I could also reduce the mortgage term, (we can afford it) to repay a bit more, (or on second thoughts if there are no early repayment fees, we could just overpay monthly as and when to suit).

Definitely do the latter, there's no point locking yourself in to new payments when it will change anyway when you move, and worst case by committing to a new term you might also trigger an early repayment charge when you move.

chunkytfg

jimbo1986 wrote: »

When I write negotiate I refer to length of mortgage, fixed period, etc.

Any thoughts on the 2 year tracker offer from Nationwide as an interim solution?

Nationwide Rem 2 yr tracker
1.84% for 24 months
Set up fee £20
Cashback offer of £200
Overpayments allowed, Charge N/A
Exit fee £65

Is there no redemption penalty for this mortgage especially if you plan of ditching it after 6 months

EDIT- ignore me I've just looked and none of there trackers have an early repayment charge