Remortgage for House on the Market

mollsa

Hi All, I hope you can help.

Our house is currently on the market, and our Fixed mortgage / minimum period came to an end in December. Since then, we have researched some sample remortgage figures and have discovered we could be paying a lot less than we currently are.

However, as we are on the market, we obviously don't want to enter into some other fixed agreement that will incur high fees if we sell up soon. The downside is that we might be on the market for 12 months or more, and do not want to keep paying over the odds.

Are there any simple remedies for this ? Anyone have any ideas ? I guess what i'm looking for is a low interest mortgage with no 'lock in' as such. Does such a thing exist ?

dmg24

Hi mollsa,

Welcome to MSE. Your question is something that I've been looking into myself (I still can't decide whether to sell or not!):

The simple answer would be to get a fee free, whole of market broker. But if you want to do the work yourself, you need to consider the following:

As you are looking to sell within a year, you need to consider the total cost that you will be paying over that period, including the arrangement fee, and the mortgage release fee (unless this is the same for all products). So, for example, on a loan of £90K (my remortgage figure!):

An SVR of 7.69% and no arrangement fee will mean total payments of £6921.

A 5 yr discounted rate, currently at 6.29%, with an arrangement of £599, will mean total payments of £6260.

A 2 yr BR tracker, currently at 5.84%, with an arrangement fee of 1% (£900), will mean total payments of £6156.

Obviously, all variable rates are subject to increase or decrease, and rates available will depend on your individual circumstances. The above figures are interest only.

If you think that you may sell more quickly, then you can compare the figures over e.g. six or nine months.

Hope that helps. If it makes no sense, just let me know! x

TenBob

mollsa wrote: »

I guess what i'm looking for is a low interest mortgage with no 'lock in' as such. Does such a thing exist ?

My house is on the market and I've just remortgaged as my Northern Rock fixed deal ends soon.

I've agreed a remortgage with Woolwich which has no arrangement fee and a fixed early redemption penalty of £275 (no percentage of the outstanding balance is charged which is what you need).

It's called a Lifetime tracker and tracks Bank Of England base rate at +0.47%. IMO, this isn't a bad rate considering there's no penalty period.

Hope this helps.
TB

Mortgagecolin

Woolwich lifetime tracker is the way to go but it is now Bank of England Base Rate +0.59% but does have free val and free legals.

payless

Mind the acc closing fee of £275 will eat into the saving !
If serious in selling ( in next few months ) You might find a deal thats better got lower overall fees (including that MEAF) even if rate a little higher

Plus some people have questions about their service!

Worth checking with existing lender also ( of course some aren't currently that helpful- no names) have something better than SVR with no ties - potential for hold ups if one solicitor dealing with a remtg for a ender and another solicitor with a sale ..

mortgage_broker_advisor

I used to work for Abbey and they had a tracker mortgage that was free to switch to. So as payless said first port of call should be your current lender

mortgagemark_2

Hi

Agree - Liftime trackers worth a look.

Are you selling to buy another as you can always "port/transfer" your new rate/mortgage to the new property so consider this also.

mollsa

thanks very much for all your advice, its been very helpful. I think I will try our current lender first to see if they can offer a lifetime tracker before switching.

Are woolwich that bad ?

TenBob

payless wrote: »

If serious in selling ( in next few months ) You might find a deal thats better got lower overall fees (including that MEAF) even if rate a little higher

If legals & valuation are free, how can the fees be lower elsewhere?

In addition, wouldn't the house have to sell very quickly (or the mortgage be tiny) for a higher rate mortgage to be worthwhile, simply to save the MEAF?

payless wrote: »

Plus some people have questions about their service!

Can you expand?

payless

lower overall fees - ie no or lower MEAF , or a admin fee lower than Woolwiches MEAF


so lets say £100K mortgage an example rate with say £99 fees ( no meaf) but even 0.3% more expensive ( and there are better than that around) could be better if say 6m before completion


service - there's a number of threads on this board ( search on woolwich) and on "broker forums" that explain .

recent feedback from my clients about post completion service with them not been great ... not saying all others are great