Remortgage now or wait?

london21

The interest rate changes has people just wanting to switch to lower rates ignoring all the total costs. Factor in all the costs and see if you are saving anything substantial. 

ElwoodBlues

london21 said:

The interest rate changes has people just wanting to switch to lower rates ignoring all the total costs. Factor in all the costs and see if you are saving anything substantial. 

To a certain extent it's about forward planning and being prudent. At current rates the savings are small, especially if I switch within Natwest rather than total remortgage with another lender.

But I can either refix now at current (historically low) rates, and get 5 years at an extremely good rate, at no overall expense. Or I can wait two years and hope that rates don't go up. What are the chances of that? I think we can be pretty certain that they won't go down, so I definitely won't be worse off. But if mortgage rates go up by 2% then I'll be £2k/yr or £160 a month worse off. For 3 years. So an overall cost of about 6k. Nothing to lose, potentially thousands to save.

Does anyone know if NatWest allow customers in a current fixed term to switch products (paying the ERC obviously)?

ElwoodBlues

Now wishing I'd gone with my original thought and taken the penalty hit to get a good rate. Six months ago my lender (Natwest) was offering 0.85% 5yr fix. Now their best rate is 2.6%! Expect it could well go up from further from here?

simon_or

Unfortunate, but no point kicking yourself, hindsight is 20-20 and all that.

ElwoodBlues

simon_or said:

Unfortunate, but no point kicking yourself, hindsight is 20-20 and all that.

Yes, question now is still similar, but the answer even less clear. I'm currently on a fix at 2.44% with 18 months remaining. Early redemption fee will be 2% until end of this year, then 1% in 2023. Best current fix with Natwest is 2.6% for 5 years. Or Lloyds are offering  2.3% on a 10 year fix. So both are very similar to my current fixed rate - changing now won't get me any benefit (Natwest will even have a higher rate than current). But where are mortgage interest rates going to go from here? In 18 months time, when my current fix is due to end, what's the chances of these rates being ancient history and another couple of percent higher? I'll be kicking myself all over again!

I guess there will be significant extra hassle and expense two switch lender from Natwest to Lloyds? Looks like valuation fee of £300, account fee of £295, plus more? Legal fee for updating the charge on the title deeds?

According to the MSE best buy comparison, both the Lloyds and Natwest offers are 'only available from the lender'. I presume this means that brokers don't have access to them? I did get the initial Natwest mortgage via a broker, so it feels a bit daunting to not use a broker this time around.