remorgage advice please

scoobylou_3

My first time so please be gentle.

I am looking to remorgage [never done it before] and read somewhere that if you have only a small mortgage it is better to pay a slightly higher interest rate and less set up fees rather than go for the cheapest rate. Is this true? Ive looked on moneyfacts site and it has helped a bit but was wondering if any of you clever people could advise more. Thinking of a 5 yr fix. some details:-

property value £100000
mortgage £ 34000
no tie in with existing mortgage

would slightly higher rate no arrangement fee be best? What about cashback. Is that worth considering? Existing mortgage with Britannia but last time I looked werent very competitive. Any advise welcome.

dastephens

I'm with Britannia and I find them one of the best around. I'v just come the end of a 2 year fixed rate and have just gone onto their 2 year tracker mortgage (follows the current interest rate set by Bank Of England) as talk of interest rates likely to fall. The good thing about this offer is that there is no tie in and no arrangement/set up fees due to being a Unison Member.

knuckledragger

scoobylou,
have a look at the moneysupermarket website for true cost comparisons of mortgages:
http://www.moneysupermarket.com/mortgages/mortgage.asp

ps You wouldn't like to swap your mortgage for mine would you?

Mortgage_Master

Hi,

The first thing you need to do is contact Britannia and ask them what kind of deal they'll offer you to remain with them (ask them if they charge a deed/admin fee for redeeming your mortgage). Armed with this knowledge you can then compare it against deals from other lenders.

Re: Your question on the fees versus rate debate:

Yes you're right, due to the size of your mortgage any fees charged by a new lender will have a negative impact on the true interest rate charged. Yes you will probably find it's better to go with a low fees deal (with free legals & Valuation) rather than the cheapest interest rate (you may find you're better off staying with Britannia depending on what they offer). Have a read of this article then once you've got the info from Britannia try this mortgage calculator to compare it against any scheme you've found on moneyfacts or elsewhere. Please note I'm linked to the above site.

This is not a recommendation but if you're specifically looking for a 5 year fixed rate you may wish to include Nationwide in your research. They have a 5 year deal which includes free legals and valuation. (remember to call Britannia first)

Please note that whilst I am a mortgage broker my comments on this site are intended as general discussion and NOT personalised mortgage advice. Please click on my name and follow the link to see a full regulatory disclosure.

***links removed - MSE Controller2***

scoobylou_3

Thanks for the help. Spoke to Britannia.
Offered me a 5 yr fix @4.99% with £349 fee payable upfront.
This would reduce payments by £38 per month.
Also a lifetime tracker with a fee of £399 saving £34 per month.
Both are a decent saving and an improvement on what we have now, and I dont want to sound greedy but I think I could probably do better.
Looked at moneysupermarket and Woolwich do an 'open plan switch & save' 5 yr fix @ 4.89% with £265 payable upfront and £195 added to mortgage but with £200 cashback. According to moneysupermarket true cost for Britannia 5yr offer is £8819 and for Woolwich £8147. Has anyone any opinion on this. I have never dealt with the Woolwich. Are they ok and is it worth the hassle of switching companies for a £700 saving. Im not sure. Have never switched before. Grateful for any advise. [Nationwide by the way were £5.19% no res fee just £95 admin fee but I dont thinks thats any better.]
Also spotted a discount at a good rate low fees but it was NOT portable. Scuse my ignorance but that suggests you cant move once your with them. Is that right?

knuckledragger

scoobylou,
The Woolwich are no better nor worse than any of the large lenders. I've remortgaged twice now and both were pain free experiences. A £700 saving over 5 years is £11.67/month. Would you rather this in your pocket or your lender's?
You are correct. If a mortgage is not portable then were you to move house then you would have to redeem the mortgage (with any associated costs for doing so).

holly876dog

I went with Mansfield BS, 3yr discount curr@4.88%. No fees for remortgage and think its £75 exit fees. With your LTV you should easily get this. You have to use their appointed solicitors etc but if its straightforward shouldn't be an issue and they use a cheap 'drive by' valuation method which costs u nothing. You can also overpay upto 10% of loan/yr, daily int etc
This isn't recommendation, this product was the best for me thats all when I was looking for low setup costs. Agree with rest of commments, you should look at low setup costs and a slightly higher rate. Its on their website. Hope it all goes well.
xx

scoobylou_3

Thanks holly876dog. I'm going to look into this asap before I decide definately on the Woolwich. Its hard to decide at the moment whether to fix, or get a discount. There are so many different viewpoints on the subject. Anyway I'll have one of each to look and compare and then I'll decide. Oh by the way would it be worth do you think going back to the Britannia and telling them I've found better deals do you think? Can they waive fees to retain customers or are these 'deals' set in stone?

holly876dog

You can try Brittania again, the least they can say is no. I was in similar position with Nationwide after my 2yr fix was up and said I would be willing to stay if the set up fees could be waived (or at least cut, was then £349) no luck though. I did point out to mortg advisor that the Nationwide would be getting £1000's in interest off me/yr but it all fell on deaf ears I'm afraid. You could also try London&Country to see what they have got. I called them about 8 weeks ago and spoke to a very nice chap and a scottish widows product came up, tracker I recall giving payable rate of 5.25% BUT you could also offset with this and fully flexible. No fees but exit fee payable. Due to the fact you don't have much mortgage left you may want to think about staying put with 1 provider as the costs of switching start to swamp what u save on headline rate.
Best of luck.

MarkyMarkD

holly876dog wrote:

I did point out to mortg advisor that the Nationwide would be getting £1000's in interest off me/yr but it all fell on deaf ears I'm afraid.

Yes, holly, £1000s in interest but next to nothing in profit.