AIP with mortgage into retirement

AliceBanned

Hi
I have had an offer accepted on a flat I'm really keen on, and also have a buyer for my flat. I am still nervous about getting full approval for the mortgage. It is for 22 years, just under 80%  LTV on a flat with purchase price of £237k. The mortgage offer is interest at 2.34% on a repayment loan of £186k.

Is this a good deal? I was expecting better rate but wonder it is because the term takes me 5 years into retirement? It won't be my last move as I would downsize before retiring so that doesn't bother me too much. Current salary is £40k.

Not sure whether to also try direct eg to Platform as the above was through a broker, who seems pretty good. There is no movement further down on the purchase price which I feel is very reasonable, and I am at the very top of my budget. Thanks for any advice, it feels like a scarey step. 

kingstreet

Platform is the broker-arm of Co-op Bank/Britannia and doesn't deal direct, AFAIK.
There are lenders lending to 75 to those with (eg) evidence of pension conts on their payslips, so the term shouldn't be much of an issue to cause a higher rate.

AliceBanned

OK thanks kingstreet so it's something else. That is for a 5-year or 3-year fixed rate so is that not particularly high, I thought rates were generally quite a lot lower? I might try London and Country or another broker. 

[Deleted User]

On those numbers I am seeing a 5yr, fee free product from Platform at 1.99%.   2.09% with a £999 fee

Platform appear to be offering amongst the best deals at that level but no idea why the broker has chosen the 2.34% over the 1.99%.  Maybe there is some criteria in there that rules you out of it

Just email and say you have seen Platform are doing these rates, why arent you eligible for them?  See what the response is

Also guilty of not updating rates.   Just clocked the 1.77% and 1.99% that Rowan mentioned

RowanF

That rate does seem a tad high. On your numbers I am getting 1.77% with fee and 1.99% without a fee - Platform updated their products overnight last night so there have been some changes. Ask your broker to review the rates or seek alternative advice in my opinion. Fee based product looks just about cost effective over it's no fee alternative but that needs checking for sure.

AliceBanned

Thanks I don’t think he is whole-of-market so I’ve sought further advice from one wgo knows me better and definitely is and will hear back tomorrow. I thought I should be getting a better rate so thanks for confirming. I will let you know how it goes.

AliceBanned

And that first broker came back expecting me to go ahead. Don’t they realise people can research and think for themselves?! The bad part of home buying/selling is the number of sharks swimming around when they smell a sale. Gets a bit wearing because we have to enquire but don’t need all this pressure.

[Deleted User]

Did you ask why he couldn't provide the cheaper rate?
Might feel like they are trying to push you in to a sale but in reality most brokers have to be forceful with clients at the moment as there is next to no guarantee that the mortgages don't disappear on a day by day basis 

AliceBanned

Sorry I’ve mostly had bad experiences with estate agents not brokers so that last post is a bit misleading. Yes I’ve asked and he is whole of market after all. My budget is so tight for the purchase that I can’t go for Lowe rates and add the arrangement fee. In that case he ought to have mentioned the 2 and 3 year fixed but he only mentioned 5 yr. after 3 years I should be in a better position and it was available at same rate! Ok thanks for letting me know about the rates and short turnaround needed I hadn’t thought of that. 

AliceBanned

Hi I also tried an IFA advisor and he couldn't get me enough for the property I have an offer on. I will go forward with the full application with the first broker, which is with Nationwide. Is it worth me checking any lenders direct as his paperwork says that these are the only deals he won't have access to? I'm not too optimistic that it will be approved in any case as my pension pot isn't great and they will probably partly base it on that as the loan is into retirement? Thanks

[Deleted User]

If you are employed and more than 10 years from state retirement age then they only need to see contributions into a pension scheme. They don't assess the actual value of the pension itself