Remortgage advice

mat31

Hi, this is from a mortgage novice that’s had a mortgage with my wife for 17 years now. Not a good time for us when we are due to get fixed to a new deal but needs must. We’ve been to see an ‘independent’ mortgage advisor, we’d like to borrow a little extra (6k) for house improvements. Now in my head we are borrowing enough to pay off our existing mortgage loan, plus the 6k. We've asked to extend the period to max 26 years (again) to keep monthly’s down, but my wife can’t grasp why the monthly payments have increased by £45? She’s been told (by a friend) to release some equity from the house through the mortgage rather than borrowing more? I can’t get my head around this? It’s hard because we are wanting to trust the advisor but are unsure if he is just picking the best deal (for him) and using our lack of mortgage savvy to get away with it. I hope that makes sense, if I need to post figures etc let me know. Sorry for my vagueness

csgohan4

post figures please

like due to the extended term, means more interest to pay and more to pay back

borrowing more and releasing equity through the mortgage are the same, equity release is different

mat31

Current mortgage amount £158k, applying for £164 (Halifax). 26 year term. 5 year fixed no fee remortgage. At 2.0%. £674 monthly payments.

mat31

Current house value £280 k

Thrugelmir

Existing mortgage interest only? :think:

In which case in 17 years you've repaid no capital.

New mortgage will be on repayment basis. Hence the increase in cost.

Though would appear your current interest rate is high.

mat31

Existing mortgage is repayment and so is new one.

muhandis

Any mortgage calculator will tell you that monthly payments of £674 is spot for the mortgage size, term and interest rate you mention for the new Halifax mortgage.

From what I know of the mostly similar procuration fees (what the broker earns from the lender for your mortgage) across different mainstream lenders and the regulation the brokers adhere to, the possibility of him risking his career by deliberating giving you wrong advice for the miniscule difference in commission across different lenders is vanishingly small.

As for why your repayments have gone up by £45, you would need to compare it with your previous deal, term and any other features.

In your place I wouldn't worry too much.

mat31 wrote: »

It’s hard because we are wanting to trust the advisor but are unsure if he is just picking the best deal (for him) and using our lack of mortgage savvy to get away with it. I hope that makes sense, if I need to post figures etc let me know. Sorry for my vagueness