Remortgage or Product Transfer

Interest

Hi all,

I'm hoping you may be able to help me decide whether to stick with Santander and apply for a product transfer, or to remortgage to another lender, if the maths make sense.

My concern about remortgaging is how much more it'll cost as I'm not on a competitive (5 year fixed) rate now and I can complete the PT 4 months prior to the current rate ending. Mortgage broken down as follows:

All on repayment, joint mortgage.

Balance £136,700
Property is detached 3 bed freehold house, Santander value it at £188k although I think its worth £200k
LTV under 75% based on their value.

Sub account 1 balance £82,692.61
Fixed at 3.95% until 3/9/19
32 years 5 months remaining

Sub account 2 balance £54,008.37
fixed at 2.14% until 3/8/19
32 years 6 months remaining

Current payment is £600, this includes a £30pcm overpayment.

Santander have told me (assuming rates do not change) I am eligible for a 2 year fixed 1.99% no fee and can switch both sub accounts to this in May 2019. I think this will cost £476 pcm, although I will overpay & continue with £600pcm. I worked out the payment on a balance of £135k by the time of renewal by the way.

I'd like to do this rather than look elsewhere because I really want to get off the 3.95% rate ASAP and by staying with Santander I can do this early, if I move lender, am I right that I'll have to keep paying it until I can complete a remortgage just after the fixed end date to avoid the 5% ERC (?). Santander have confirmed the ERC is 5% for the full 5 year fixed. This means I'll also have to pay at least 1 month of their 4.99% standard variable on the smaller sub account.

I would then look to remortgage to another lender in 2 years when both sub accounts align, as I appreciate remortgage rates for new customers with lenders may well be cheaper,

Can anyone share their thoughts, would you stick with Santander to get the more cost effective deal ASAP rather than risk paying the 3.95% rate until September?

Thank you in advance, happy to provide more info if required.

adamcarvell

I'm in a similar situation i can change deal now with Santander but if i switch lender i am liable for the 5% ERC until April the 4th.

Interest

adamcarvell wrote: »

I'm in a similar situation i can change deal now with Santander but if i switch lender i am liable for the 5% ERC until April the 4th.

Nice to know I'm not alone.

It's really annoying that the ERC doesn't reduce year on year, it seems a lot of other lenders are more flexible. I did know from the original paperwork the ERC was fixed of course, still annoying.

adamcarvell

Interest wrote: »

Nice to know I'm not alone.

It's really annoying that the ERC doesn't reduce year on year, it seems a lot of other lenders are more flexible. I did know from the original paperwork the ERC was fixed of course, still annoying.

yes they wave the ERC if you stay with them and put you on the new lower rate straight away as soon as they receive the signed paperwork.

getmore4less

What rate do you think you can get by moving lender and what fees?

do the numbers it's fairly simple.

doing rough calcs you fill in your real ones.

You have £80k paying 2% more for 4 months and £50k paying 3% more for 1 month around £660.

To save that over 2 years you need a rate on £130k about 0.25% cheaper can you get a no fee 2y rate for 1.75% with another lender