Re-mortgage / renew mortgage deal assistance

SplanK

Hi all,
I'm currently trying to work out which mortgage deal to take on one of my sub mortgage accounts which is about to come to the end of its 5 year term. Any help would be great to determine which is going to be the more effective option.

We have a Natwest mortgage, split into 2. This was due to having a fixed rate mortgage and then moving part way through.

I have considered moving away from Natwest and taking he hit on the early repayment charge on the 2nd account, but once you add that, plus any other fee's, then it starts to reduce, or would cost more than what's on offer from NatWest.

I did briefly consider a 2 year fix which would allow the 2 sub accounts to be closer to each other, but it would mean running one account on SVR rate for 6 months, and I am concerned that rates will continue to go upwards. I also prefer to have stability in outgoing costs so looking at another 5 year fix. It is not likely at the moment that we would move again in this time.

Here is where we stand today

HPI Valuation: £224628 / LTV 53%

Sub Account A: £80969.63 / 4.09% / Term Left: 21y 7m / Deal Ends: 31/03/2019
Sub Account B: £38258.38 / 2.98% / Term Left 21y 7m / Deal Ends: 30/09/2020

Total payment: £698.46, but we overpay £201.54 per month into Sub Account A (well, that's what I asked Natwest to do!)

I will continue to over pay, keeping the total payment at £900 per month.


At present, I am currently undecided on a lump sum payment of £5000 on switch over day – we am likely to be coming into some money within the next 6-12 months so I may ‘take a loan’ from my one of my savings accounts which has low interest. Depending upon future pay-rise, I may increase the monthly overpayment by £50-100 in the near future as well.

I am looking at a 5 year deal. Natwest offer presently:
2.44% with £995 fee <-- I would not add the fee to the mortgage
2.97% with £0 fee. <-- I would pay off £995 of the mortgage to reduce the total

Now, my calculations seems to suggest that in both scenarios (where there is a £5000 lump sum + £100 extra overpayment, and no lump+extra over) that taking the initial hit on the fee would still be worthwhile, by about £800-£1000, but wanted to triple check before committing!


Thanks

getmore4less

That 4% rate probably should have been switched ages ago with a <60%LTV.

The 3%rate looks high as well

Offer rates also look high

What is the ERC on the small bit?

SplanK

Thanks for the comment


ERC will be 2% IIRC on the 38k

SplanK

Doing some more homework and thought on this…..


We have 2x sub accounts. So I was tempted with the cost of £1000 for the cheaper mortgage rate with NW.... but I was fixated on that one account and didn't not consider the 2nd account when it renews in 2020..... When I renew that, chances are there could be another fee for the better deal...… £2k within 2 years for rate that's not market leading.


After re-reviewing, its starting to make sense to navigate away from NatWest to another provider as the initial costs could be similar to what I would be paying NW anyway. Currently looking at Nationwide who seem fairly favourable with their deals and charges at the moment but will do a better search tomorrow.

getmore4less

Hi all,
I'm currently trying to work out which mortgage deal to take on one of my sub mortgage accounts which is about to come to the end of its 5 year term. Any help would be great to determine which is going to be the more effective option.
....

HPI Valuation: £224628 / LTV 53%

Sub Account A: £80969.63 / 4.09% / Term Left: 21y 7m / Deal Ends: 31/03/2019
Sub Account B: £38258.38 / 2.98% / Term Left 21y 7m / Deal Ends: 30/09/2020

I get
£471.15pm
£200.45
£671.60 pm

Total payment: £698.46, but we overpay £201.54 per month into Sub Account A (well, that's what I asked Natwest to do!)

I will continue to over pay, keeping the total payment at £900 per month.


At present, I am currently undecided on a lump sum payment of £5000 on switch over day – we am likely to be coming into some money within the next 6-12 months so I may ‘take a loan’ from my one of my savings accounts which has low interest. Depending upon future pay-rise, I may increase the monthly overpayment by £50-100 in the near future as well.

I am looking at a 5 year deal. Natwest offer presently:
2.44% with £995 fee <-- I would not add the fee to the mortgage
2.97% with £0 fee. <-- I would pay off £995 of the mortgage to reduce the total

Now, my calculations seems to suggest that in both scenarios (where there is a £5000 lump sum + £100 extra overpayment, and no lump+extra over) that taking the initial hit on the fee would still be worthwhile, by about £800-£1000, but wanted to triple check before committing!


Thanks

lets sort this one out first fee or no fee.

the rough calc of max saving based on interest only is £80k * (2.97% -2.44%) * 5 = £2,180

repayment will be lower and smaller mortgage will be lower.

21y 7m term amount left after 5 years taking the fee off the no fee

£80,969.63 2.44% £402.44 £65,810.15
£79,974.63 2.97% £418.62 £65,718.32

make the payment the same to compare same cashflow
£80,969.00 2.44% £418.62 £64,779.02
£79,974.00 2.97% £418.62 £65,718.32

but you have £700pm to throw at this, £900-£200 on the other bit

£80,969.00 2.44% £700.00 £46,842.37
£79,974.00 2.97% £700.00 £47,541.57

Now overpay £5k

£75,969.00 2.44% £700.00 £41,194.16
£74,974.00 2.97% £700.00 £41,742.03


We should really do the comparison for the fee based with the overpayment on the other bit at a higher rate, but hat only improves the situation so we can leave that step out.

getmore4less

SplanK wrote: »

Doing some more homework and thought on this…..

We have 2x sub accounts. So I was tempted with the cost of £1000 for the cheaper mortgage rate with NW.... but I was fixated on that one account and didn't not consider the 2nd account when it renews in 2020..... When I renew that, chances are there could be another fee for the better deal...… £2k within 2 years for rate that's not market leading.

That second smaller bit is most likely too small to make the fee version worth it.
doing the same as above on that for a 5y fix £995 paid up front .
£38,258.00 2.44% £195.05 £30,783.33
£37,263.00 2.97% £195.05 £30,620.73


After re-reviewing, its starting to make sense to navigate away from NatWest to another provider as the initial costs could be similar to what I would be paying NW anyway. Currently looking at Nationwide who seem fairly favourable with their deals and charges at the moment but will do a better search tomorrow.

Stating where you are you have £995 fee against a £760 ERC to leave.

You are going to be taking around £119 mortgage to a new lender should be easy to cover any fees over 5 years

Each 0.1% better rate covers around £500 in costs

You could crunch the 5 years staying amount left, it will be around £78k

NW 1.89% £999 fee
£120k 1.89% £900pm £75,296