Re-mortgage advice please.

top4718

My current mortgage with Alliance & Leicester has just come out of a fixed period and risen from £398pm to £458pm.

I have contacted them for a new deal.

They have offered £426pm with £1200 in fees to be added to the mortgage.

Is this a good deal or do I shop around???

What comparison sites to be you recommend???

Thanks in advance.

beecher

How long is the fixed rate they're offering you for, and what is the interest rate? You'd only be saving £30/month which doesn't sound worth £1200 unless it is a 5 year deal , and even then you're going to be paying interest on it for the remainder of the term. It might be worth finding out what deals they have which are fee free as it might end up cheaper.

If you post income, house value and outstanding mortgage I'm sure someone can help more

top4718

Income £38,400

House Value £150,000

Outstanding Mortgage £61,000

beecher

http://www.alliance-leicester.co.uk/mortgages/index.asp?page=all-rates

I take it your deal is on here? It is definitely worthwhile looking at the feesaver deals to see if you'd be paying less. Depends on how big your mortage is though.

beecher

If you tell me how many years you have left, and the details of the fixed rate you've been offered, I can work out what your payments would be with or without fees

top4718

Years Left - 19

2 Year fixed rate at 5.69% with £1200 fees.

homer_j_3

Its not worth paying the 1200 fees for that as it is equiv to paying an extra £50 a mont on top over the 2 years.

You would be better searching for a fee free remortgage deal with a higher rate.

You will have exit fees to pay if you move but I think you have transfer fees if you stay with the a&l so consider these but if the payments are less than £78 more than your current payment on a fee free 2 year deal, it should be cheaper than that deal you have been offered.

Your income and ltv is good so you should have plenty of choice.

beecher

There are 2/3/5 year fixed rates with no fees at 6.24% on the A&L website - it'd cost you £457.39 which I think is what you're paying now? (which seems odd - shouldn't the SVR be higher?) It is definitely not worth paying the £1200 in fees.

top4718

The info is at home, I will double check the figures.

The consensus seems to be not to pay the fees though, which is good advice.

homer_j_3

they are currently paying 398 p/m. The fee free deal quoted by beecher is less than 78 per month extra and therefor would be a cheaper option over the 2 yr period.

There may be cheaper fee free deals and 2 years may be too short if you have no intention of moving for the next 3-5-7 yrs for example.

I would have a look around or speak to a professional and see what they can do.

If you try and put current balance and current interest rate at current term, it will not accurately reflect what they are paying now because you are mid term. Check your figures by all means but you have the info you require.

beecher

homer_j wrote: »

they are currently paying 398 p/m. .

The bit that confused me is that the payments have gone up to £458pcm, which I thought was maybe it going on to the SVR?

As a side note, I don't think it is good that banks automatically think you'll be okay with a fee if it is put on the top of the outstanding mortgage. They should be offering the no fee deal to people with smaller mortgages as I bet a lot of people just automatically take whatever they're offered.