Halifax - Should i stay or should i go

Mark-W_2

Hi, well my dilema is a little different so i though i would ask a little advice.

When i bought my current house i borrowed an extra £75k at a rate of 4.99% about 18 months ago, so i actually have a £145k mortgage split into 2 parts.

Part 1 fixed rate is due to expire at the end of this month and halifax have put me on their svr of 7.25%.
Part 2 fixed rate runs until 01/01/2009, £72k @ 4.98%.

If i choose to leave halifax they will charge me 2% of the £72k as a redemption fee and an additonal £175 admin fee, so around £1,600 to leave.

Would i be better off staying with halifax on a tracker at 6.84% for 9 months, until Part 2's fixed rate expires?
Or change to another provider?

Will i make the £1,600 back within 9 months on a lower rate?

Thanks for any repleies

welshchocolatelover

Our Mortgage Advisor has just got us a 3 year tracker rate at 5.95% (0.7% above base rate) if that's any help?.

Mark-W_2

welshchocolatelover,

thanks for the reply, the rate does seem good, but i dont think it would be enough to make the change beneficial.
Im still trying to get my head around it at the moment.

dwsjarcmcd

The difference in the rate is 1.86%. On £72k, that equates to about £1340 in additional interest p.a, so over 9 months = £1005. Therefore I would stay with the Halifax and not pay the redemption fee.

David

UK007BullDog

Best is to stay and either fix or tracker it. If you tracker it you might have to buy yourself out just like on your second mortgage now. Only on SVR are you free to move at any time without penalties. So make sure the tracker allows this.

You will not find anything better than what you currently have with the 4.99%. rates have gone up.

I suggest this: Fix for 3 or 5 years. then your second mortgage comes of age fix that one for 2 or 4 years, so that they are eventually coming of age pretty close together. Then when both are on SVR remortgage the lot. This might be better financially for you than paying out the ERC's.

Or wait and stay on the SVR until the 2nd mortgage finishes then remortgage the lot.

You just have to crunch your numbers.

Dick_here

Apart from any financial considerations, you've left it a bit late to go to a new lender anyway.

herbiesjp

Mark-W wrote: »

Would i be better off staying with halifax on a tracker at 6.84% for 9 months, until Part 2's fixed rate expires?
Or change to another provider?

Will i make the £1,600 back within 9 months on a lower rate?

Thanks for any repleies

You need to ask Halifax for one of their tracker deals with no penalties attached at any time.

That way when the second deal expires, you can re-mortgage both amounts to a new lender (if they are offering the best deal) without paying any penalties.

I doubt very much you will make up the £1600. The 4.98% deal Halifax is a great deal and one I would not want to pay a penalty to get out of

SO in short, stay put, on a penlty free deal and the fixed rate deal - when they both expire at the same time, you are then free to do as you wish

Mark-W_2

hi,

thank you all for your advice

I know it seems like i left it far to late to do anything about but i started looking at this 6 months ago, created a spreadsheet and had a good little action plan.
Unfortunately i had a family death early Feb and had totally put it to the back of the list of things to do only remembered when the letter dropped through my door last week.

I have spoken to the Halifax and im just waiting for some more info on their tracker rates, although they dont seem too great.

6.84% (boe +1.59%) = no fee, but repayment charge applies (anyone know what level this is?)
6.69% (boe +1.44 ) = £499 fee, but repayment charge applies.
6.99% (boe +1.745) = £99 fee, no repayment fee

Shame im not a brand new customer they can get 5.83% with a £499 fee.