remortgage term dilema

dimbo61

Have you checked your current lenders new deals for existing customers ?
With such a low balance  moving lenders might not be worth it

kokolino23

dimbo61 said:

Have you checked your current lenders new deals for existing customers ?
With such a low balance  moving lenders might not be worth it

I can only switch to a new product 3 months before the end of our current deal. By that time, I expect the rate to go up, possibly twice. 
You might be right though .50 or 1 percent increase is only around £9/month more.
However, moving to a new lender shouldn't cost us anything because the legal fees are included and there is no fee for this product.

Thrugelmir

kokolino23 said:

dimbo61 said:

Have you checked your current lenders new deals for existing customers ?
With such a low balance  moving lenders might not be worth it

However, moving to a new lender shouldn't cost us anything because the legal fees are included and there is no fee for this product.

That's why lenders have a minimum borrowing requirement. There's a threshold where once administration costs are factored in as well the business becomes uneconomic to underwrite. 

If rising interest rates are a concern. Probably best to over the mortgage by whatever you can. Focus on repaying the mortgage debt as quickly as possible. Will be the best use of your time I'd suggest. 

housebuyer143

kokolino23 said:

dimbo61 said:

Have you checked your current lenders new deals for existing customers ?
With such a low balance  moving lenders might not be worth it

I can only switch to a new product 3 months before the end of our current deal. By that time, I expect the rate to go up, possibly twice. 
You might be right though .50 or 1 percent increase is only around £9/month more.
However, moving to a new lender shouldn't cost us anything because the legal fees are included and there is no fee for this product.

I would swallow a potential £9 increase to not switch. It's a lot of hassle for almost no gain for you

dimbo61

You will have a mortgage exit fee with existing lender and other costs to change lenders

mark55man

Plus I think it unlikely rates will rise twice in 3 months given how fragile UK plc is at the moment.  despite inflation.

I think I agree with the poster who said wait and go with the same supplier whilst overpaying as much as you can.  It's not going to cost a lot either way

kokolino23

dimbo61 said:

You will have a mortgage exit fee with existing lender and other costs to change lenders

We won't have an exit fee because our current deal ends in September. A new lender that has free legal and free valuation shouldn't cost us a penny. We found already a good deal through a broker from L&C but I'm not exactly sure how the porting will work because we need to pay a lump sum at the end of our current deal.

housebuyer143

kokolino23 said:

dimbo61 said:

You will have a mortgage exit fee with existing lender and other costs to change lenders

We won't have an exit fee because our current deal ends in September. A new lender that has free legal and free valuation shouldn't cost us a penny. We found already a good deal through a broker from L&C but I'm not exactly sure how the porting will work because we need to pay a lump sum at the end of our current deal.

Every mortgage company has an exit fee. It's normally £100-£200 but it's to cover the admin for closing your account. Check your policy. You might find you will make no saving when you factor this in.

getmore4less

£20k on a 2y repayment schedule.
Interest paid
2% £420
3% £631
4% £844

K_S

housebuyer143 said:

kokolino23 said:

dimbo61 said:

You will have a mortgage exit fee with existing lender and other costs to change lenders

We won't have an exit fee because our current deal ends in September. A new lender that has free legal and free valuation shouldn't cost us a penny. We found already a good deal through a broker from L&C but I'm not exactly sure how the porting will work because we need to pay a lump sum at the end of our current deal.

Every mortgage company has an exit fee. It's normally £100-£200 but it's to cover the admin for closing your account. Check your policy. You might find you will make no saving when you factor this in.

@housebuyer143 You are right in that a lot of lenders do charge an exit fee (usually known as a redemption fee or a mortgage discharge fee) when you redeem the mortgage but plenty don't as well.

Some large mainstream lenders that don't (as per current intermediary resi products available) include the likes of Virgin, TSB, HSBC, NatWest, Platform, Halifax, etc. Among the high-street ones that do, Santander is the worst at £225 with Leeds close behind at £195.

FWIW, as a broker when I compare two products across lenders, the redemption fee is taken into account as well for arriving at the 'total cost'.