Mortgage Help...well remortgage actually

mercman_3

am just looking through the market to consider a fixed 5 / 10 yr mortgage (not sure if fixing for so long is a good idea)?

Have just come across these 2 high street lenders.... can anybody explain these please as to me they dont add up

Abbey = Our lowest offer - currently 4.64% until 02.10.2010

Changing to our Standard Variable Rate - currently 6.75%
The overall cost for comparison is 6.0% APR


Nationwide = Fixed rate mortgages
Term Minimum Deposit With £389 reservation fee
Initial Rate Followed by The overall cost for comparison is 5.6% APR (5 yr)
5 years 10% 4.69% 5.4% APR (10 yr)
10 years 10% 4.89%


Term Minimum Deposit No reservation fee
Initial Rate Followed by The overall cost for comparison is 5.8% APR (5 yr)
5.6% (10 yr)
5 years 10% 5.09%
10 years 10% 5.29%

What i really dont understand is the overall cost comparison.....How can the abbey rate be cheaper over the period, but the overall cost over the period be more??

Am really really confused

Current deal is up Oct 28th, so how soon can I get another deal signed off so that I can forget about it?


Regards


Pete

knuckledragger

Pete,
With the Abbey deal you are on their introductory rate until 2010. Then you revert to their Standard Variable Rate (SVR) for the remainder of the term. They usually determine a mortgage over 25 years (although it could be over almost any time span) for comparison purposes. So you would be on their SVR for almost 20 years which gives the average of 6% for comparison AND why it is more expensive over 25 years than the other deal.

Some lenders are better than others but I would leave 6-8 weeks to sort out a remortgage. When it's agreed, you could always set the redemption date with your current lender and inform your new lender.

meanmachine_2

provided there are no "hangover" charges with the Abbey mortgage then that one is actually cheaper, as you would be free to remortgage once the intro rate is up and thereby avoid reverting to the SVR.

Amazingly, many mortgage holders don't remortgage and pay the higher SVR!!!

Dumb.

mercman_3

We are already currently with the abbey.

Would i be right to assume that i could negoiate for them to waive any chargers as a current customer?


regards

Pete

MarkyMarkD

No, you wouldn't be right. They are very unlikely to waive such fees as they are the only way they make any money!

knuckledragger

mercman,
you could always chance your arm with the Abbey if you want their deal. Ring their mortgage centre, tell them the deal that you want, and ask for it to be done by way of a Deed of Variance. There should be no cost to you in doing it this way and little cost to them. If they want you to stay then they might go for it. A month before a mortgage I had with the Principality BS was due to go on their SVR, they sent me through a Deed of Variance with another mortgage deal to go on to. I declined it as it wasn't that competitive.
Worth a try.

MarkyMarkD

They'll still charge the product fee.