Remortgaging with Northern Rock + Endowment Question

superfurry

Hi. I am coming to the end of my mortgage deal with Northern Rock - 1st October. Been with them 7 years, switched to a repayment deal 2 years ago and paid hefty fees then. I have a balance of £50k and want to add £15k to the new loan amount for an extension. They have quoted me several fixed rates based on 2 year and 5 year with and without an arrangement fee ( which is £695 )

2 year = 4.69% + fee or 5.09% no fee
5 year = 4.99% + fee or 5.29% no fee

They also want a £250 mortgage review fee which there is no explanation as to why. They are also trying to give me a "£1000 help with costs" incentive if I stay with them for 3.5 years at least.

Now before I ring them up to ask them to waive these fees,

A) Should I bother - and what should I say e.g. i'm not paying those fees !

Any good deals out there you remortgagers

C) I would like to spread this over 15 years to reduce the lifetime of the loan

D) Is daily interest always better than annual ?

E) I've always felt that I took the wrong deal with NR years ago, and really want to start afresh. Anyone agree ? I guess all lenders are money grabbing b#stards !


I've also got an endowment with Scottish Life (now part of Royal London) and me and wife have been paying in ~ £45 a month each for the last 7 years. Should I keep this going ? I keep on receiving letters warning me that I will not reach the capital needed to repay mortgage - although I have swithced to a repayment 2 years ago.Can I stop payments and just let it grow like a savings plan, or would they still charge me to keep it going ? I understand life cover is included, but that's the gamble isn't it !

MarkyMarkD

(A) (1) they won't waive the fees. NR's whole business model is based on churning customers between products and the fees are the only thing which makes it all work financially for them.

(A) (2) NR's Help with Fees is a complete scam - it ties you in for longer than the discount/fixed product tie period, and is rubbish value.

(B) Yes there are lots of good deals at the moment - but probably not with NR. Try a comparison site like https://www.charcolonline.co.uk

(C) No problem.

(D) Monthly v Daily makes no difference if it's interest only, and relatively little difference (maybe 0.10% or so) on repayment. It only makes a large difference if you pay lots of extra amounts and then if you make them at the wrong time in the month/year. Annual v Monthly is similar to the above. In both cases, only pay a little extra for daily rather than monthly/annual.

(E) You probably did but then we all make mistakes.

You can stop payments on most endowments (making them "paid up") which will obviously reduce the final pay-out. Whether it's worthwhile continuing the full payments or not is too big a question to answer here (apart from being advice which isn't allowed).

EdInvestor

Hi Superfurry

superfurry wrote:

I've also got an endowment with Scottish Life (now part of Royal London) and me and wife have been paying in ~ £45 a month each for the last 7 years. Should I keep this going ? I keep on receiving letters warning me that I will not reach the capital needed to repay mortgage - although I have swithced to a repayment 2 years ago.Can I stop payments and just let it grow like a savings plan, or would they still charge me to keep it going ? I understand life cover is included, but that's the gamble isn't it !

They would charge you to keep it going and its value at maturity would go down.

Post some figs about it so we can have a look.

Guaranteed sum assured
Total bonuses so far
Surrender value
Maturity date

dunstonh

They would charge you to keep it going and its value at maturity would go down.

Not quite true. Most providers reduce or remove charges once a plan is paid up.