5 Yr Mortgage Comming to an end

rfeenie

Unless I am mistaken your LTV is 72%, not 58%?  debt / current house value x 100.  https://www.bankofamerica.com/mortgage/learn/how-to-calculate-home-equity/

Hoenir

mazibee said:

Also are there plus points on stayiong with the existing lender?

Switchig lenders may incur other costs i.e. valuations and legal fees. A broker may well be the easiest route to determine if there's good alternatives out in the wider market. 

morgmonster

We're in similar ish shoes to you. We remortgaged in August 2019 at 1.99%. Currently 300k outstanding and LTV is less than 50%. We were expecting our next rate to be in the order of 5.99%, so seeing the Santander offer of 3.89% pop up when we became eligible to choose a new deal a couple of weeks ago was a huge relief. We were planning to pay off a lump of 15k using savings, so paying out a £999 product fee is fine for us. What we've done is accept the 3.89% with £999 fee but add the fee onto the mortgage to avoid paying it now, so we can move to another deal or another lender if rates drop in the next 5 months or so. If we stick with this offer we will pay off the £999 within 21 days of it starting which means no interest is calculated on it.
Not sure if you've noticed, but for new customers the santander 5 year fix rate has gone up slightly to 3.99%, and the fee free option to 4.24%. The latest inflation numbers were a little higher than expected and I believe rates are not expected to be cut as fast as they were say a month ago so lenders have increased some of their lowest rates. If I were you, I would click through the offer in the online banking to the point where you get it emailed to you - this locks it in for 14 days so at least you have that time to think about it with no loss. 

morgmonster

Just wanted to add - bonus of staying with the existing lender is that they don't credit check you again or revalue the house. When we remortgaged in 2019 we were tied to Santander because since we first bought in 2014 we had had three children and I wasn't working. We were happy with our incomings and outgoings but no new lender would have agreed to offer, so we had to stay with Santander. This time around DH has had a pay rise, and I'm back working part time, and the LTV is a lot lower so we should be able to move if we want to.

Also, I don't think you'll find anything lower than 3.89% at the moment. There is a MSE mortgage best buy search which suggests Natwest also has a 5 year fix at 3.89%, there are a handful under 4%.

hufc2002

3.89% seems a good rate for a 5 year fix at moment.  Our cheap fix ends 01/08 and I’ve just submitted a product transfer with Virgin for a 5 year fix at 4.03%.  This comes with a £995 which for the time being I have added to the mortgage.  I will now continue to regularly check what products are available between now and when my current fix ends and if a cheaper product becomes available I’ll switch to that but worse case scenario I have this one to fall back on. 

grumbler

There are many comparison sites, including here, at MSE - Mortgage best buys

It looks like  you are unlikely to find anything better than your 3.89%

mazibee

I am in a perplex either to go  a fixed  5 Year or fixed 2

5 Yr Fixed at 3.89% Product fee Upront £999.00

2 Yr Fixed at 4.39% Product fee Upront £999.00

due to these upcomming Bank of England meetings

Thursday 21 March     March MPC Summary and minutes
Thursday 9 May         May MPC Summary and minutes and May Monetary Policy Report
Thursday 20 June     June MPC Summary and minutes

Interest rates are likely to go down but no one has idea when theyt will start goung down and at what pace

mazibee

rfeenie said:

Unless I am mistaken your LTV is 72%, not 58%?  debt / current house value x 100.  https://www.bankofamerica.com/mortgage/learn/how-to-calculate-home-equity/

Home Value has increased to £431K

so £251K/£431K = 58.?? % LTV

May  be i am wrong in this calculation, hope someone senior will help me in calculating the LTV?

amnblog

That 3.89% 5 year rate is right at the low end of the market currently, cannot see anything better this morning

fergie_

rfeenie said:

Unless I am mistaken your LTV is 72%, not 58%?  debt / current house value x 100.  https://www.bankofamerica.com/mortgage/learn/how-to-calculate-home-equity/

The 58% is taking into account the increase in property value since 2019.

I was in much the same boat and ended up opting for the 5y fix. To be worth paying the higher 2y fix, rates would need to drop a lot on the other side.

The recent drops in rates were based on the markets expecting central banks to cut rates agressively this year. This currently looks less likely - as reflected in swap rates going up and up since late January. Yes it, could flip back the way, but the data currently suggests otherwise. (Pay rises, inflation etc)

As others have said, that 5y rate with fee seems very competitive.