Switching Mortgage Deal

chunkydog

We’re currently looking for a new mortgage deal, we understand that switching with our current provider (Nationwide) would mean we don’t have to pay solicitors Feds etc. However over the past couple of years we’ve spent £70k renovating the property. 

From an LTV point of view we think the current value would take us from 65 to 57% so probably wouldn’t get a better rate. Is there any benefit telling them about the increase in value and remortgaging at the lower LTV if the rate is the same, as there will be additional valuation, solicitors fees etc if we go down that route?

Whats_your_forte

The Nationwide system will self generate a valuation on their system. If this sits you above the 60% and with the £70k spent on the property, you can appeal this figure and supply the evidence needed.

You then probably want to see how the Nationwide rate switch rates sit against the open market at under 60% LTV before deciding whether leaving them is your best option depending on prices

chunkydog

Thank you. I just checked and we’re bordering on the 60% at what we think the property is now worth. We can add savings to pay off some of the mortgage to bring it under the 60% if needed. 

We’re looking at a 3 year fixed, the difference in cost between the rate at > 60 % LTV and < 60 % is £554 over the 3 years, so not huge I guess. From what you’re saying it sounds like there would not be any additional costs doing this through Nationwide. 

I’ll have a look to see if other lenders rates are low enough to offset the solicitors, arrangement and valuation fees. Thanks for your time. 

Thrugelmir

You money would be better spent reducing the mortgage rather than paying for a formal valuation. 

Whats_your_forte

You don't need to pay for the valuation. The appeal on the valuation doesn't incur any costs