Mortgage renewal

Paul1079

Just looking for advice on my mortgage , my 2year fixed deal comes to an end in June but I’m able to secure a new deal now , my rate coming to an end is 1.39% , I am thinking about fixing for 3 or 5years , both rates are 1.89% but the 5year one has a £999 set up fee !! I’m tawn between them both as I’d like to fix in as long as poss but didn’t really want to pay £999, also would you do it now or wait until nearer June , I know no one can predict the future but any help would be appreciated.
Thanks in advance .

foxy-stoat

You will need to crunch the numbers as your ERC may be payable - ask your lender.

Lilla_D

Just a few thoughts:
- £999 arrangement fee is pretty much the standard fee. Yes, there are deals with lower or even no arrangement fee, but the vast majority residential deals have £999 or £995 arrangement fee.
- I guess when you mentioned that you could remortgage now (ahead of the deal ending in June), you meant that you'd get a new deal from the current lender, i.e. an early repayment charge wouldn't be applicable even if you completed the rate switch ahead of June. Is this a correct assumption?
- When you take a new deal from your current lender, sometimes they can complete before your current deal ends, while other lenders will only complete when the current deal comes to its end. It's important to clarify which category your lender falls into.
- If you could secure the new deal from your current lender, but it wouldn't start until the current one finishes, then there is no risk in applying for the new rate. And if something better comes up before June, you can just apply for that better deal and cancel this 1.89% application.
- If you go with the 3yr deal because it doesn't have an arrangement fee, there's no guarantee what deal and what arrangement fee you'll get in 3 years' time. I.e. you may get a higher rate deal with a higher arrangement fee and with a hindsight, the current 5yr deal would have been better. Who's to tell?

Nebulous2

How much is your mortgage? Fees are better value on higher mortgages. Saving a small percentage with a fee, often isn't worth it on a small mortgage.