Early remortgage

dont_use_vistaprint

Hi I am on 1.39% with Halifax due to expire Aug-31 and am looking at offers, costs and penalties if doing now 

Does anyone know the percentage they typically charge if going over the 10% and paying off in full and how the calculation is done ?

I know it’s on my offer but I cannot access it or contact them until Monday and want to do calculations now 

Second question is about 10% annual overpayment amount. I read somewhere you may be able to exceed it by increasing your monthly payment on some deals  which is treated differently and doesn’t come off the overpayment buffer. It may have related only  to Barclays though. Does this make any sense ? 

Third question. When remortgaging with the same provider, does the agent generally have any ability to waive or reduce  early repayment penalty to get a deal or is it simply not done , everything is as per algorithm with no wiggle room. Would an independent  advisor be able to do this if not directly with the lender ?

Last question. How much will rates rise between now and September / best case / worse case estimate !?


thanks  

TheJP

Why would you want to mortgage to a higher rate when you have 8 months of a very very low rate? Unless you are in a position to pay the mortgage off in full. Rates are likely to peak at 4.5% in 2023 and potentially start to decline in 2024. However no one knows what will happen. If i were you i would wait until your fixed term is about to end and then see what the options are.

kingstreet

dont_use_vistaprint said:

Hi I am on 1.39% with Halifax due to expire Aug-31 and am looking at offers, costs and penalties if doing now 

Does anyone know the percentage they typically charge if going over the 10% and paying off in full and how the calculation is done ?

I know it’s on my offer but I cannot access it or contact them until Monday and want to do calculations now 

Second question is about 10% annual overpayment amount. I read somewhere you may be able to exceed it by increasing your monthly payment on some deals  which is treated differently and doesn’t come off the overpayment buffer. It may have related only  to Barclays though. Does this make any sense ? 

Third question. When remortgaging with the same provider, does the agent generally have any ability to waive or reduce  early repayment penalty to get a deal or is it simply not done , everything is as per algorithm with no wiggle room. Would an independent  advisor be able to do this if not directly with the lender ?

Last question. How much will rates rise between now and September / best case / worse case estimate !?


thanks  

Probably 1% of amount redeemed in final year, but check.

With Halifax? Unlikely.

That's a rate switch, or product transfer. A remortgage is a new loan from a new lender. No, staff don't have such ability.

No idea. Your crystal ball is as good as mine...

dont_use_vistaprint

Thanks - yes it’s a rate switch but isn’t that the same thing   you have to pass all the checks, get an offer based on the new affordability / LTV / Credit check and pay off the current mortgage. It’s just within one lender yes 

dont_use_vistaprint

TheJP said:

Why would you want to mortgage to a higher rate when you have 8 months of a very very low rate? Unless you are in a position to pay the mortgage off in full. Rates are likely to peak at 4.5% in 2023 and potentially start to decline in 2024. However no one knows what will happen. If i were you i would wait until your fixed term is about to end and then see what the options are.

I just want to do do the maths and see myself. 

Likely to peak at 4.5 but SVR should be used because most people don’t have the 2nd crystal ball to tell them they will be accepted and not stuck on SVR. Being stuck on SVR even at todays rate would be extremely bad for me 

TheJP

dont_use_vistaprint said:

Thanks - yes it’s a rate switch but isn’t that the same thing   you have to pass all the checks, get an offer based on the new affordability / LTV / Credit check and pay off the current mortgage. It’s just within one lender yes 

Yes but you would still have to pay the early repayment charge and be moved onto a new HIGHER rate than what you currently are on. Even if its with the same lender unless they stipulate in your contract that there is no ERC if you switch with them (Unlikely though). Again i ask the question why you would switch a very good rate 8 months before it ends to go onto a potential rate of 5% and above?

TheJP

dont_use_vistaprint said:

TheJP said:

Why would you want to mortgage to a higher rate when you have 8 months of a very very low rate? Unless you are in a position to pay the mortgage off in full. Rates are likely to peak at 4.5% in 2023 and potentially start to decline in 2024. However no one knows what will happen. If i were you i would wait until your fixed term is about to end and then see what the options are.

I just want to do do the maths and see myself. 

Likely to peak at 4.5 but SVR should be used because most people don’t have the 2nd crystal ball to tell them they will be accepted and not stuck on SVR. Being stuck on SVR even at todays rate would be extremely bad for me 

There are tacker mortgages that are 0.29% above BOE rate which would mean at 4.5% BOE paying 4.79%. Even if you didn't do anything until August you'll get a better rate than the SVR.

All fixed rates I've seen currently are between 5.25-6%, you lock yourself into something at 5% and above for 5 years you'll be kicking your self if the BOE rate drops to 3% and economy stabilises and lenders offer 3.75+ rates.

With your rate you'll still reap the benefits with the savings each month, maybe calculate what you might pay on a new rate between now and august and save it.

penners324

There's no way around the ERC. It's based on the outstanding balance on the day It's cleared.

A rate switch does not trigger affordability checks

dont_use_vistaprint

penners324 said:

There's no way around the ERC. It's based on the outstanding balance on the day It's cleared.

A rate switch does not trigger affordability checks

Are you 100% sure moving to a tracker or new fix at the end of a fix would never be blocked and leave you on SVR?

The reason I ask is a lot could change in 8 months including much higher than than expected SVR but also personally things like employer, contract type/length, credit rating & even  Tax residency status. 

I would rather switch to 5% now with a penalty  than end up stuck on say 8% SVR for 2-3 years. Unlikely I agree but not out of the question if the economy gets worse 

kingstreet

dont_use_vistaprint said:

Thanks - yes it’s a rate switch but isn’t that the same thing   you have to pass all the checks, get an offer based on the new affordability / LTV / Credit check and pay off the current mortgage. It’s just within one lender yes 

Nope. None of those usually apply.

TheJP

dont_use_vistaprint said:

penners324 said:

There's no way around the ERC. It's based on the outstanding balance on the day It's cleared.

A rate switch does not trigger affordability checks

Are you 100% sure moving to a tracker or new fix at the end of a fix would never be blocked and leave you on SVR?

The reason I ask is a lot could change in 8 months including much higher than than expected SVR but also personally things like employer, contract type/length, credit rating & even  Tax residency status. 

I would rather switch to 5% now with a penalty  than end up stuck on say 8% SVR for 2-3 years. Unlikely I agree but not out of the question if the economy gets worse 

So pay out 0000s on a whim?