Product switch

marie_82

I am due to come to the end of a 5 year fixed deal end April 22 and am thinking I will end up trying to do a product switch rather than a remortgage as my lender seems to be competitive and it seems a lot less hassle.
Product switch obviously means no other changes to term or amount apparently. 
I have two parts to my current mortgage as did some further borrowing but timed it so they are ending at the same time. 

As it is in two parts and I obviously will be merging them when switching, do they count this as a change and therefore would it count as a remortgage rather than a simple product switch? 

K_S

@marie82 If you're staying with the same lender, most will not permit you to merge two parts into one. You'll have to do two separate switches.

This thread might answer your question more fully

https://forums.moneysavingexpert.com/discussion/comment/78858514#Comment_78858514

marie_82

Thanks, you are right as I have just managed to get hold of someone at Barclays although they are adamant I will be charged the fee on both parts of it which is rather annoying! 

ACG

marie_82 said:

Thanks, you are right as I have just managed to get hold of someone at Barclays although they are adamant I will be charged the fee on both parts of it which is rather annoying! 

This is interesting.
I have never had to do this as a broker, but when I worked for Co-op bank where this happened we would only charge the fee once. 

Maybe make a complaint and just see if they can do anything. If you do not ask and all that. 

marie_82

ACG said:

marie_82 said:

Thanks, you are right as I have just managed to get hold of someone at Barclays although they are adamant I will be charged the fee on both parts of it which is rather annoying! 

This is interesting.
I have never had to do this as a broker, but when I worked for Co-op bank where this happened we would only charge the fee once. 

Maybe make a complaint and just see if they can do anything. If you do not ask and all that. 

Yes that was the girl on the phone said and I asked if she was sure and she said she was however I do have an appointment with the actual advisor from Barclays early Feb so I am hoping that the girl on the phone has got it wrong and I will definitely push it I think. Or just go for the slightly higher rate with no fee as there only seems to be about £100 in it over the 5 years I am planning to fix. 

penners324

Pick the option without fees....

getmore4less

marie_82 said:

ACG said:

marie_82 said:

Thanks, you are right as I have just managed to get hold of someone at Barclays although they are adamant I will be charged the fee on both parts of it which is rather annoying! 

This is interesting.
I have never had to do this as a broker, but when I worked for Co-op bank where this happened we would only charge the fee once. 

Maybe make a complaint and just see if they can do anything. If you do not ask and all that. 

Yes that was the girl on the phone said and I asked if she was sure and she said she was however I do have an appointment with the actual advisor from Barclays early Feb so I am hoping that the girl on the phone has got it wrong and I will definitely push it I think. Or just go for the slightly higher rate with no fee as there only seems to be about £100 in it over the 5 years I am planning to fix. 

marie_82 said:

ACG said:

marie_82 said:

Thanks, you are right as I have just managed to get hold of someone at Barclays although they are adamant I will be charged the fee on both parts of it which is rather annoying! 

This is interesting.
I have never had to do this as a broker, but when I worked for Co-op bank where this happened we would only charge the fee once. 

Maybe make a complaint and just see if they can do anything. If you do not ask and all that. 

Yes that was the girl on the phone said and I asked if she was sure and she said she was however I do have an appointment with the actual advisor from Barclays early Feb so I am hoping that the girl on the phone has got it wrong and I will definitely push it I think. Or just go for the slightly higher rate with no fee as there only seems to be about £100 in it over the 5 years I am planning to fix. 

Be carful a lot of people get the calculations wrong including comparison sites because of the rules on how to compare are wrong

What are the details,

size of mortgage (both bits)
Current rate
LTV
full term 
rates on offer
payment
planned overpayments(Important as it makes a difference)

Barclays 7y rates used to be good but the 5y are probably marginally better depending on how you think rates are a going to move.


if you look at the 60% LTV rates over 5years(1.32%+£999 or 1.59%) these are the break even size needed depending on term/payment. (need a mortgage at least that big to make the fee worth while)

term	size needed
5	£147,009
10	£99,283
15	£89,563
20	£85,386
25	£83,066
30	£81,593
IO	£76,510

K_S

marie_82 said:

Thanks, you are right as I have just managed to get hold of someone at Barclays although they are adamant I will be charged the fee on both parts of it which is rather annoying! 

@marie_82 I just checked with Barclays while speaking to them about something else and they did say that only one fee will be charged as long as you are switching to the same product for both parts.

Please don't assume that you won't be charged a fee based on my post Your case might be different, or I might have been given incorrect information by the agent, which happens a LOT even with the Barclays broker-support line.

marie_82

that sounds more the case that the girl on the phone just got it wrong then. 

I am below 60% LTV and will have about £153000 in total left with 20 years left. Currently overpaying by £50 p/m but hoping to increase this to £100.

Current rate is 1.89% on main part and 1.99 on other bit (now approx £16000).
Repayment mortgage obviously. 

Wanting to fix it as soon as allowed as can only see them going up now but knowing my luck in the 90 days between arranging rate and it kicking in it will probably go down 😫

getmore4less

With  those numbers and the possibility of 1 fee against 2 fees.

How bad could it be?
(skip to bottom if not bothered about the calculations

20y full term amounts after 5y

amount	rate	payment	owing
£153,999.00	1.32%	£730.44	£119,220.88

big bit is over the breakeven for a fee, smaller bit no fee.

amount	rate	payment	owing
£137,999.00	1.32%	£654.55	£106,834.22

small bit no fee

amount	rate	payment	owing
£16,000.00	1.59%	£77.87	£12,463.34

total payment £2 more a month and £77 more debt  ~ £200 more total

with £100pm overpayment

amount	rate	payment	owing
£153,999.00	1.32%	£830.44	£113,021.68

or 

amount	rate	payment	owing
£137,999.00	1.32%	£654.55	£106,834.22

£830.44-£654.55=£175.89

amount	rate	payment	owing
£16,000.00	1.590%	£175.89	£6,346.34

£113,180  left if you can't get the low rate on both for 1 fee. that's against £113,022   if you can


getting the lower rate on both bits saves ~£160 over 5 years.

Not that big a deal at the end of the day.

marie_82

That’s great so just to clarify I am better going for the lower rate with the fee even if I have to pay the fee twice but even better if I pay once or have I read it wrong. A lot of numbers there for my brain 😂