Switching mortgage provider after receiving mortgage offer?

m4x1ne

Hi,
My partner and I are FTBs and we've had an offer accepted on a house. The vendors are still looking for a property to buy themselves, so it's early days but we're all (obviously) pushing to complete before the stamp duty holiday ends.

Partner and I have had a mortgage offer from Barclays (we applied directly, no broker, 74% LTV, 10 year fixed @ 2.75%), but now I'm seeing that Accord mortgages do a 10 year fixed-term mortgage at 2.44% or a 7 year fixed-term at 2.19%. I see that Accord mortgages are broker only. 

We're set on having a 7-10 year fixed term, and while partner has permanent employment I work on fixed-term contracts. I have a record of having contracts renewed over the last 6 years, and my current contract ending in June will be renewed, but hasn't been yet. We didn't get a Nationwide AiP for our full loan amount because of my being a contractor, whereas Barclays didn't care at all. I don't know where Accord would stand on this.

Would it be madness for us to find a broker and apply for a mortgage with Accord instead? 

K_S

@m4x1ne In theory, there's nothing stopping you from making a new application. There isn't close to enough information to be able to say if your case would fit Accord or not.

As a broker, I would suggest that you tell them upfront that you have an offer from Barclay's.

getmore4less

At 75% LTV 10y fixes are not that good that Barclays is particularly expensive

shame you don't qualify for the Barclays 75% LTV  1.49% 7 year rate.


5 years rates are much more competitive and in 5 years you may be able to hit 60% just with payments 

What sort of rate rises are you expecting.

looking at the Barclays 1.67% 5year rate over 25  against that accord 2.44% 10y
first 5years (use £100k it scales anyway)

amount	rate	payment	owing
£100,000.00	1.67%	£445.60	£80,838.39
£100,000.00	2.44%	£445.60	£84,556.72

Accord after 10

amount	rate	payment	owing
£100,000.00	2.44%	£445.60	£67,111.78

target Barclays 5year

amount	rate	payment	owing
£80,838.00	3.51%	£445.60	£67,142.38

that's around 7 x 0.25% rate rises and against current 60% 8 rises.

Also there is that 1.49% 7year rate at 75% as a retention deal you should qualify.

Not sure how Barclays are on track and switch  you could take the of £999  on a tracker then switch to the 1.49% 7 year rate
or just go for a 2y and see how it goes.

depending on the size of the mortgage there could be considerable savings even adding an extra £2K

with track and switch on £200k over 7years around £10k saved even after £2k of extra fees

m4x1ne

@K_S, telling a broker we already have a mortgage offer is a great idea, thank you.
@moreforless, wow this is very helpful, thank you. I know that the 10 year fixeds are particularly expensive. We hadn't thought about calculating the amount interest would have to break even on a 5% deal though, I'll talk to my partner about it.
We really wanted that 1.49% 7 year Barclays mortgage but it's a premier mortgage (unless you're talking about another one?) and our income isn't high enough to qualify. We tried to wrangle it anyway but with no luck. 

lonibra

You can have as many applications as you want. 

getmore4less

m4x1ne said:

@K_S, telling a broker we already have a mortgage offer is a great idea, thank you.
@moreforless, wow this is very helpful, thank you. I know that the 10 year fixeds are particularly expensive. We hadn't thought about calculating the amount interest would have to break even on a 5% deal though, I'll talk to my partner about it.
We really wanted that 1.49% 7 year Barclays mortgage but it's a premier mortgage (unless you're talking about another one?) and our income isn't high enough to qualify. We tried to wrangle it anyway but with no luck. 

That Premier customer is a new borrowers requirement  at 75% LTV not there for 60% LTV

Also once you are into retention/product transfers looks like they drop the premier requirements.

You need to look at the EMC reward range of products to see those.
https://www.barclays.co.uk/mortgages/existing-customer-centre/mortgage/

I would check if you can track and switch to the 7y as an existing borrower(cost is £999 or 1% with a no fee options + £749)
worse case do a 2y and hope they are still the best 7 year option in 2 years.

Part of looking for your deal is looking at what the lender offers for product switch  some are not as good and you can get trapped if circumstances change. 

m4x1ne

So it is - I didn't realise that.

Ok, going to look into all of this. Thanks so much again - all super helpful. It's also making me realise that there are lots of mortgage tactics that partner and I hadn't considered at all!

getmore4less

I don't know how amenable the lenders are to track and switch you don't read much about it here except in relation to my deal is up but we might move soon........try a no ERC tracker.

One for the brokers they may know

Track and switch does come up on hotukdeals mortgage threads but they get very heated 

m4x1ne

I gave Barclays a ring and they confirmed that you could take their 1.72% no ERC 2 year tracker, and immediately switch to the 1.49% 7yr fixed as long as you pay the ~£750 fee. Absolutely ridiculous loophole but I'm not complaining! I'm going to triple check that's correct though, because it still sounds too good to be true.

ukri

Right on. That does work. Just the matter of the £1000 product fee on the tracker.

m4x1ne

The mortgage we originally went for has a £999 fee too. Like an idiot, I paid the product fee for the mortgage up front. I'll know for next time: always add it to the mortgage & overpay later so you can back out. So there'd be a £150 switch fee to go to the tracker instead (could be worse for such an expensive mistake), but there's no getting that £1000 back anyway.