One for the brokers out there…

Needsadvice13

So our fixed rate comes to an end in April 2024…. And I’m starting to get ahead of the game and do some research about remortgaging/product transfers.

background info…

I have 6 defaults from 2018 (a failed relocation/unexpected health issues really messed with my finances) all of which were partially settled and absolutely squeaky clean ever since. 5 of the 6 will be gone from credit report by 3rd July 2024 and the last one in Nov 2024. Husband has perfect credit file.

Due to the last adverse we had to go with Kensington and we fixed at 5.09% for 2 years. In some ways I’m grateful that we are used to larger payments as the jump in rates won’t be such a shock to us. At the end of fix term we will have £274181 left on the mortgage. 

My questions are…

1. Im guessing we still have no hope of high street unless we pay the SVR for 4-5 months (would be painful at circa 10% but doable) wait for defaults to drop off and then remortgage? For example with nationwide on a 10 year fix?

2. I like the idea of the Kensington Flexi fix for life as the home we have bought is our forever home so the plan is to stay put until retirement and then downsize and put the money into our retirement funds. We are happy to pay a slightly higher interest rate for the security of knowing we never have to remortgage and having our payment stay stable. We will be overpaying by approx £500 a month too. Do brokers know if Kensington offer this option as a product transfer?

3. Do any brokers have a rough idea of what the current product transfer rates are with Kensington? Are they similar to the rates that they are currently offering to new customers? Or are they slightly better/worse?

4. One thing I’m trying to get my head around is that on Kensingtons info it says on the fixed for life you can make overpayments of up to 10% of the original balance each calendar year which is perfect. BUT it also says that the balance will reduce but term will stay the same?! How does that work? 

Just trying to get a gauge on what are options will be 😊

grumbler

Needsadvice13 said:

4. One thing I’m trying to get my head around is that on Kensingtons info it says on the fixed for life you can make overpayments of up to 10% of the original balance each calendar year which is perfect. BUT it also says that the balance will reduce but term will stay the same?! How does that work? 

Monthly payments get smaller until they become zero (?)

ACG

You may be able to get normal rates when the time comes, your adverse will be quite historic by then. 
Kensington do have some rates which are a little above the high street, but I think in the current climate they start at around 6.5% which is give or take 0.5% to 0.75% above the high street. 

You have a long time to go yet and if the last 6 months are anything to go by, a lot can change. 

Keep an eye on the kensington site if you are happy to stick with them. But I would not close of other options. 

I dont know if Kensington do Product transfers, I think they do (or they were looking at) but I also know that some of the specialist lenders do "product transfers" which still entails a full application and underwrite, so I am not sure if kensington do them and if they do, how it works in practice. 

I would have a chat with your broker at the end of summer. If nothing else just to gauge options. 

Needsadvice13

grumbler said:

Needsadvice13 said:

4. One thing I’m trying to get my head around is that on Kensingtons info it says on the fixed for life you can make overpayments of up to 10% of the original balance each calendar year which is perfect. BUT it also says that the balance will reduce but term will stay the same?! How does that work? 

Monthly payments get smaller until they become zero (?)

Ah I see, so payments reduce and you would just then top up to the usual amount plus the overpayment. 

Needsadvice13

ACG said:

You may be able to get normal rates when the time comes, your adverse will be quite historic by then. 
Kensington do have some rates which are a little above the high street, but I think in the current climate they start at around 6.5% which is give or take 0.5% to 0.75% above the high street. 

You have a long time to go yet and if the last 6 months are anything to go by, a lot can change. 

Keep an eye on the kensington site if you are happy to stick with them. But I would not close of other options. 

I dont know if Kensington do Product transfers, I think they do (or they were looking at) but I also know that some of the specialist lenders do "product transfers" which still entails a full application and underwrite, so I am not sure if kensington do them and if they do, how it works in practice. 

I would have a chat with your broker at the end of summer. If nothing else just to gauge options. 

That’s very helpful, thank you 😊 

babypenguin18

Hi! I have a similar situation but more recently dated defaults around 2020. I’ve just been approved for an AIP with Yorkshire Building Society who have much more attractive rates than the specialists - worth a call to them closer to the time! Or submit an AIP online and they might refer and ask for an explanation.
Definitely speak to a broker though and weigh up all your options

amnblog

Needsadvice13 said:

1. Im guessing we still have no hope of high street unless we pay the SVR for 4-5 months (would be painful at circa 10% but doable) wait for defaults to drop off and then remortgage? For example with nationwide on a 10 year fix?

Possibly, dependent on what your credit file looks like.

2. I like the idea of the Kensington Flexi fix for life as the home we have bought is our forever home so the plan is to stay put until retirement and then downsize and put the money into our retirement funds. We are happy to pay a slightly higher interest rate for the security of knowing we never have to remortgage and having our payment stay stable. We will be overpaying by approx £500 a month too. Do brokers know if Kensington offer this option as a product transfer?

I have never seen this product offered for Kensington product transfers. Currently two and three year fixes only but each case has it's own offering.