Short time left on mortage

Hoenir

Petriix said:

It might well be better to remortgage to a different provider, borrowing £25k on a 1 year fix and sticking the difference in an ISA from which you could drip-feed a bunch of regular savers. You'd have to do some sums. 

Mortgage balance is too small to remortgage. Would also incur around £1,200 of costs in any event. 

V3cash

I would ask your mortgage company what the redemption figure is at the end of fix, I think they charge an administrative exit fee at end.
Not sure how much as I paid my last mortgage off early but didn’t incur that as I just overpaid then made last mortgage payment.
Have you calculated what your new payment would be, is it actually that much on 12,000?
compared to now?
What would you save with loan?

StephAshcroft

Thank you all for your comments and suggestions.  I am about to call NatWest and find out the answers to the questions you have suggested I ask.

StephAshcroft

Just spoke to the Advisor - it isn't as bad as I thought it was going to be.  After the fixed rate ends, I go on the standard variable rate of 7.4%, which means I will pay £552 per month - just an estimate based on my current balance - over the remaining two years, BUT I can overpay as much as I want, and hopefully pay it off sooner, with no penalty charges and no costs to to discharge the mortgage deed.  Thanks again for all your help!!   

V3cash

StephAshcroft said:

Just spoke to the Advisor - it isn't as bad as I thought it was going to be.  After the fixed rate ends, I go on the standard variable rate of 7.4%, which means I will pay £552 per month - just an estimate based on my current balance - over the remaining two years, BUT I can overpay as much as I want, and hopefully pay it off sooner, with no penalty charges and no costs to to discharge the mortgage deed.  Thanks again for all your help!!   

Brilliant! Sounds like you will soon be mortgage free.! Enjoy the feeling and freedom 😊

Altior

StephAshcroft said:

Just spoke to the Advisor - it isn't as bad as I thought it was going to be.  After the fixed rate ends, I go on the standard variable rate of 7.4%, which means I will pay £552 per month - just an estimate based on my current balance - over the remaining two years, BUT I can overpay as much as I want, and hopefully pay it off sooner, with no penalty charges and no costs to to discharge the mortgage deed.  Thanks again for all your help!!   

If your credit report is strong you could consider a workaround.

Apply for two or more credit cards, MT & BT deals. You need at least one of each. You then use the MT to pay the mortgage (via a current account, when your ERC doesn't apply), and straight away transfer the MT balance(s) over to the BT card(s). 

You have to be reasonably confident with your personal finance, not be tempted to use the cards for spending that will incur interest, and not be planning to apply for other credit in the near future. It's easily doable though. The intended outcome is that you've effectively moved your secured liability @ 7.4% to unsecured liability @ 0% (less modest transfer fees). If you do consider this, carry out some eligibility checks, and ideally do the applications on the same day, starting with the best offers (long interest free periods/low fees) with best predicted chance of approval. 

For example, I just got a NatWest card 0% fee free for 8K (12 months) and a Tesco 1% fee for 4K (18 months). So that's nearly 12K for £40 (I already had approaching 100K of available credit on CCs).  Also have a contingency plan in place if you get to the end of the 0% deals and can't access any more deals (unlikely if your circumstances remain stable, but you need an exit strategy just in case eg liquid savings to tap).  

The 'expert' level if this strategy appeals is only paying the minimum repayments, and putting what you would have put towards the mortgage in high interest savings accounts instead (eg regular savers). You then get 6/7% interest (less any applicable tax), and pay the credit card off with them upon maturity. 

Fishyfish111

Just checked mine. HSBC offer from 10k it says.

V3cash

Altior said:

StephAshcroft said:

Just spoke to the Advisor - it isn't as bad as I thought it was going to be.  After the fixed rate ends, I go on the standard variable rate of 7.4%, which means I will pay £552 per month - just an estimate based on my current balance - over the remaining two years, BUT I can overpay as much as I want, and hopefully pay it off sooner, with no penalty charges and no costs to to discharge the mortgage deed.  Thanks again for all your help!!   

If your credit report is strong you could consider a workaround.

Apply for two or more credit cards, MT & BT deals. You need at least one of each. You then use the MT to pay the mortgage (via a current account, when your ERC doesn't apply), and straight away transfer the MT balance(s) over to the BT card(s). 

You have to be reasonably confident with your personal finance, not be tempted to use the cards for spending that will incur interest, and not be planning to apply for other credit in the near future. It's easily doable though. The intended outcome is that you've effectively moved your secured liability @ 7.4% to unsecured liability @ 0% (less modest transfer fees). If you do consider this, carry out some eligibility checks, and ideally do the applications on the same day, starting with the best offers (long interest free periods/low fees) with best predicted chance of approval. 

For example, I just got a NatWest card 0% fee free for 8K (12 months) and a Tesco 1% fee for 4K (18 months). So that's nearly 12K for £40 (I already had approaching 100K of available credit on CCs).  Also have a contingency plan in place if you get to the end of the 0% deals and can't access any more deals (unlikely if your circumstances remain stable, but you need an exit strategy just in case eg liquid savings to tap).  

The 'expert' level if this strategy appeals is only paying the minimum repayments, and putting what you would have put towards the mortgage in high interest savings accounts instead (eg regular savers). You then get 6/7% interest (less any applicable tax), and pay the mortgage off with them upon maturity. 

Can I ask why you need to transfer MT straight away? I had a MBNA MT card which I just kept paying off as it was 0%

But it has a transfer fee as does most BT cards, wouldn’t that mean 2 fees?
that is if MT=money transfer and BT= balance transfer?

Altior

V3cash said:

Altior said:

StephAshcroft said:

Just spoke to the Advisor - it isn't as bad as I thought it was going to be.  After the fixed rate ends, I go on the standard variable rate of 7.4%, which means I will pay £552 per month - just an estimate based on my current balance - over the remaining two years, BUT I can overpay as much as I want, and hopefully pay it off sooner, with no penalty charges and no costs to to discharge the mortgage deed.  Thanks again for all your help!!   

If your credit report is strong you could consider a workaround.

Apply for two or more credit cards, MT & BT deals. You need at least one of each. You then use the MT to pay the mortgage (via a current account, when your ERC doesn't apply), and straight away transfer the MT balance(s) over to the BT card(s). 

You have to be reasonably confident with your personal finance, not be tempted to use the cards for spending that will incur interest, and not be planning to apply for other credit in the near future. It's easily doable though. The intended outcome is that you've effectively moved your secured liability @ 7.4% to unsecured liability @ 0% (less modest transfer fees). If you do consider this, carry out some eligibility checks, and ideally do the applications on the same day, starting with the best offers (long interest free periods/low fees) with best predicted chance of approval. 

For example, I just got a NatWest card 0% fee free for 8K (12 months) and a Tesco 1% fee for 4K (18 months). So that's nearly 12K for £40 (I already had approaching 100K of available credit on CCs).  Also have a contingency plan in place if you get to the end of the 0% deals and can't access any more deals (unlikely if your circumstances remain stable, but you need an exit strategy just in case eg liquid savings to tap).  

The 'expert' level if this strategy appeals is only paying the minimum repayments, and putting what you would have put towards the mortgage in high interest savings accounts instead (eg regular savers). You then get 6/7% interest (less any applicable tax), and pay the mortgage off with them upon maturity. 

Can I ask why you need to transfer MT straight away? I had a MBNA MT card which I just kept paying off as it was 0%

But it has a transfer fee as does most BT cards, wouldn’t that mean 2 fees?
that is if MT=money transfer and BT= balance transfer?

Most MT cards have a rate in my experience, eg 4.9% for 2 years. Indeed, if you can achieve a long 0% deal on MT then there would be no need to clear it down straight away, BUT it's ordinarily worth keeping the 'mule' card clear if it has zero transfer fees, rather than hold a balance.  

BikingBud

StephAshcroft said:

Just spoke to the Advisor - it isn't as bad as I thought it was going to be.  After the fixed rate ends, I go on the standard variable rate of 7.4%, which means I will pay £552 per month - just an estimate based on my current balance - over the remaining two years, BUT I can overpay as much as I want, and hopefully pay it off sooner, with no penalty charges and no costs to to discharge the mortgage deed.  Thanks again for all your help!!   

Your new deal would be based on £12k debt and cost you £552 over 24 months?

I make that £13,248, nearly £1250 interest not sure that is particularly good deal.

£7,500 – £15,000: from 5.9% APR