Northern Rock Together Mortgage Advice

Lyndsey_Lou

We're about one and a half years into a Together Mortgage with the Northern Rock.
With the mortgage and secured loan, we borrowed 107% of the property value, and are on the SVR.
As part of the deal we got £1000 help with fees, which we need to repay if we switch within the first 3 years.
Our flat has gone up enough in value for us to have the option of applying for a better 95% LTV deal with another lender.
Is it likely to be worth investigating this given that any savings on the monthly bill would have to be offset against the £1000 we'd have to pay back to Northern Rock?

Thanks

payless

possibly

would need more info on mtg size, number months left on any tie ( is a 36 or 42m tie ?)
any other penalties

then to discuss other features- like how likely to move home in near future
l

MarkyMarkD

Whilst this is academic given that you've already made the mistake, the NR "help with fees" option is just a con! Either you are tied in at a duff rate for an undue period (meaning that you pay them back the £1000 through excess interest) or you get fed up of being ripped off and redeem early and hence repay the £1000. Either way, you end up repaying the £1000 in one way or other.

Lyndsey_Lou

Thanks payless! The 25 year mortgage and loan together are for £73000. We have no tie in to the mortgage itself, however if we move before May 2007 (36 months) we have to repay the £1000 "help". We're pretty unlikely to think about moving within the next 4-5 years. The payments are affordable, and I'm happy with the service, but of course I'd like to be reduce the amount if it's feasible...

I'm aware that this is far from being the best deal available, however when we wanted to buy we had to take into account the Scottish offers over system, our complete lack of a deposit, and the fact that we had to buy pretty much everything we needed for the hous, so it was really the only viable option.

tinalives

Hi Lyndsey,

Sorry to go off subject a little but we've also got a Together mortgage and just wondered if you've been notified of any reduction in interest rate yet? We haven't.

Lyndsey_Lou

Hi tinalives! We haven't had anything through about a rate drop yet and I don't really expect them to be too quick off the mark given that a lot of people on this deal owe more than 100% of their property value and would find it difficult to move (or just confusing like me )

tinalives

Grrrrrrrrrr!!!!!!! What more can I say!

payless

VERY ROUGH
so I assume pre rate drop you are paying 5.89%

assuming you swap it all ( don't think you are obliged to, as some is unsecured?)

Fees to swap £1000 ( HwC repay)
£250 Exit ( whether to include this in calcs , depends on chancesw of moving again after say 2 yrs)
---
£1250

thats 1.7% of you loan amount , so in say 20m you need to say this amount = thats approx 1% pa

so you need a rate 1% below current ( compare like for like - pre drop rates) to break even
assuming you get a totally free swap ( or a higher % rate saving if you end up paying fees)

A few variables in there, so you need to sit down and do some sums and research ( or speak personally to someone who could help ) BUT on the face of it , its a very close call ( if my assumptions are correct) especially if looking at 95% , and even less likely if want to keep the flex options that you currently have

Lyndsey_Lou

Thanks so much for this! I think that we'll stay put for the time being, and hope that we get the 0.25% drop passed on soon, and make a move once we're out of the 36 month period where we have to repay the HwC...