New mortgage deal

[simon]

Nationwide. 
Approx 75k left to pay
Current deal is
Approx 410.00 per month 
1.99% 
It was fixed for 2 years. 

Now time for new deal
Loan to value 60.01-75%
Options are.  
2 years fixed rate initial rate 1.29% product fee £999 standard rate 3.59% and APRC 3.3% 

2 years fixed rate initial rate 1.79%  free. Standard rate 3.59% and APRC 3.4% 

3 years fixed rate initial rate 1.49% product fee £999 standard rate 3.59% And APRC 3.2% 

3 years fixed rate initial rate 1.84% free. Standard rate is 3.59% and APRC 3.2%

5 years fixed rate initial rate 1.54% fee £999 standard rate 3.59 and APRC 2.9%

5 years fixed rate initial rate 1.84% free standard rate 3.59% and APRC 3.0% 

TRACKER RATE
2 years base rate 1.29% and initial rate 1.39% fee £999 standard rate 3.59% And APRC  3.3% And no early repayment charge

2 years base rate 1.89% initial rate 1.99 free standard rate 3.59% and APRC 3.4% And no early repayment charge. 


Any help much appreciated. 

Also does initial rate lower my monthly payments ?

And is APRC important ?  

dimbo61

What about the Big picture !
Are you planning on staying in the property for at least 5+ years.
Do you need the security of the longer fix.
Can you overpay ? I think Nationwide allow upto £500 a month !
A mortgage broker would do a full fact find before offering advice.
However with only £75,000 left on the mortgage I don't think paying £999 fee is worth while.
Why not use " whatsthecost " and put in the exact mortgage balance and the different deals ( add £999 onto the mortgage balance if £999 fee applies ) and you can works out the monthly mortgage payment and outstanding balance after the 2/3/5 year deals.

tim_london

APRC assumes you don't remortgage when the fix deal ends and stick with the current standard variable rate until you pay off everything, it also takes your mortgage fee into account.  For most people this is not important because they will find another deal when the rate ends.  

However it is wise to look at it if there is a close tie breaker between products.  If your situation changes and you can't get a new mortgage in the future then this may make a big difference.  

To answer your question - yes lower initial rate does lower monthly payment assuming your mortgage term stays the same (i.e. 10year, 15 year, 20 year).  However the better recommendation is that when you work out how much you can afford each month and tweak your mortgage term to pay that.  e.g. (made up figures)
1.78% at 15years = £400 p/m
1.69% at 13years = £400 p/m
This way you pay off your mortgage way faster.  It's not about how much you pay per month but how much of that money goes towards your house versus the bank as interest.  

Petriix

There's a really useful tool here: https://www.moneysavingexpert.com/mortgages/compare-fixed-rate-mortgages/.

Comparing the 5 year fixes with and without fees: If you add the fees to the mortgage it would cost you £178 extra over a 25 year term, but over the five year fix you'd pay £513 less (but have £413 more still outstanding). If you don't add the fees to the mortgage then (including the fee) you'll pay £345 more.

However, if you overpay by the £7 per month difference then even if you add the fees to the mortgage, you'll end up with a slightly lower outstanding balance (£62,606 vs £62,630) after the 5 year fix. But, if you were planning to overpay anyway (you should!) then it's vaguely possible that you might negate all £24 of the possible savings. Either way, the fee basically cancels out the reduction in interest rate so the difference is minimal over a 25 year term.

Of course, the numbers change (and tip in favour of the no-fee product) if the remaining term is shorter than 25 years. You don't mention the remaining term but it looks like ~ 18 years based on your monthly payments. At that term, the difference would be £5 per month and the no fee product would save you £44 over the 5 year fix.