Fixed mortgage Advice Required.

wildey_saver

Evening All,

I am coming to an end of a Fixed Rate period of 3.99% with C&G. They want £199 for me to go onto another product, the fixed rate they offered is 5.09%, which seems really poor to me.

I've scanned around and was going to move to the Nationwide, their 2 year fixed deal with no fees seemed very good. however I then spoke to a broker firm (no names at this stage) who told me yesterday about a halifax special deal of 4.29% for 2 years, which had a booking fee of £599 but everything else was paid for.

I can't see this on the web site - is it too good to be true ? Is there something fishy going on ? If I do go to another lender I want to be able to stay and move products in 2 years time without having to jump lenders again - can anyone advise which of Halifax and Nationwide might have a better chance of offering decent futures ?

Other than that has anyone any suggestions for a fixed rate deal ? i fall out of my fix on August 31st so know I need to do something very soon but cannot help feeling rates may drop again soon.

Help - I seem to be going round and round in circles.....

MortgageGenie

Hi,

The Halifax deal you're referring to is available exclusively via brokers that's why you can't find it on Halifax's website. It comes with a free valuation & free standard legals but has a £200 mortgage discharge fee. It really depends on the size of your mortgage as to which deal works out better financially over the introductory rate term.

Regarding your question on which of these 2 lenders is most likely to offer you the best rates as an exisiting customer then the answer has to be Nationwide Building Society. (wasn't always the case though so could change again)

Fairdo_2

Just to back up what MortgageGenie says, wholeheartedly agree that Nationwide would currently be a better Lender to stay with if you don't want to bed hop with lenders, as Halifax are great for new custom, but do not have much on offer for existing borrowers. Those Nationwide Ads (Brand new customers only!!!) were generally aimed at Abbey (especially the subtle branch colour schemes) and Halifax.

First Active may also be a lender to look at if you are looking for long term loyalty, as they have a good standard variable rate and are actively promoting loyalty for their customers.

N9eav

When I called my financial advisor around for a remortgage last week, she did not even open her bag. She said that seeing as I had a Nationside mortgage already I should stay there as they have the best deals.... Their best 2 yr fixed is 4.39% Fees free and booking fee £398
http://forums.moneysavingexpert.com/showthread.html?t=73159

Fairdo_2

N9eav wrote:

When I called my financial advisor around for a remortgage last week, she did not even open her bag. She said that seeing as I had a Nationside mortgage already I should stay there as they have the best deals.... Their best 2 yr fixed is 4.39% Fees free and booking fee £398
http://forums.moneysavingexpert.com/showthread.html?t=73159

That is all well and good, but things can change very rapidly with mortgages, but we can't assume what was good last week is going to be good this week.

The Arrangement Fee is £389, not £398 and depending on amount of borrowing, there could be a better option with a higher rate, but No Arrangement Fee. It depends.

The First Active, I said that might be worth looking at, would not necessarily be best at the moment, but the wider question of long term overall, could be in there with a shout.

The best thing would be to get a Broker to look at your wishes and work on the MOST SUITABLE for you.

wildey_saver

The amount required to borrow is £92k against the house value of approx £250k.

How would this affect which deal is best ?

Also when is the next interest rate decision, would it be worth holding on for ?

Chris

MortgageGenie

yes, from a monetary view point the amount you're looking to borrow will affect which product works out to be the most competitive over it's introductory rate period. You need to do some comparisons and look at the figures very closely. I don't know your personal circumstances so can't say which would be best. However at that level of borrowing don't automatically discount schemes which have fees (unless there is another reason to do so apart from a monetary one) If you are specifically looking at 2 yr fixed rates you should include Nationwide's £389 arrangement fee option in your research.

The next BOE decision is on 4/08. Is it worth holding on for? who knows how much the markets have already factored in reductions...

MarkyMarkD

The markets have already priced in more than the next reduction, so I'm not sure I'd wait for the BOE decision before buying a fix.

I would always suggest that anyone considers their existing lender first. And I would also suggest, given that there ARE switching costs (whether these are explicitly paid, or charged through a higher product rate), that you consider the NEXT move after the current one. And that means not buying from Abbey or Halifax (in particular) who don't let existing borrowers have new customer products.

Ask ANY lender you want to borrow from whether they would let you have the full range of products when you come to research your options a few years down the line.

DELBERT

hi

have a look at west bromich building society web page they are offering good rates 4.99% with no fees at all, if you want to pay a fee to lower the rate even more they are offering excellant rates starting from 1.95% upwards with different perks depending on the size of your mortgage.

MarkyMarkD

DELBERT

Nobody with a £92k loan is going to be better off taking a "fee free" product IMHO. The break-even point is normally around £50k-£60k: "fee free" is better for smaller loans, and "pay a fee" is better for larger loans than the break-even point.

AuntyJean

I am a complete ignoramous when it comes to mortgages and in my case all I want is the cheapest overall mortgage (ie the lowest amount that you have to pay to borrow money over a term).

Could someone please do some number crunching and explain the true overall cost based on the following assumptions.

Interest only (Re-)mortgage amount £75,000
Term 15 years, fixed for 5 years at an initial rate of 4.48% then 5.75%
with no early redemption fee.
Finally, the ridiculous assumption that interest rates do not change over 15 years.

Now, my question is if I were to move that mortgage after the initial 5 years (knowing that I am only paying off the interest and none of the capital), what would be the amount required by the first mortgage company to transfer to another one (I don't mean fees, and given no early repayment charges).

I just can't get my head around the fact that you could move to another company borrowing the same amount (£75,000) for another low initial rate but over 10 years, then moving it again in 5 years to cover same amount for 5 years.

Would this cost more than leaving it where it is for the full term? According to my calculations total interest leaving it where it is would be £59,925.60, whereas moving it would be £50,400. So why do lenders give discounted initial rates? There has to be a catch?

Assuming you were putting any extra money into say an ISA, after 5 years you could reduce the capital thereby cutting the rate even more.