Re-mortgage

Duff_3

OK I'm sure the question has been asked thousands of times but I'm going to ask it one more time. My current fixed rate mortgage is up end of July and I'm looking around for a new deal. House is worth £185,000, I owe £96,000 but would like to borrow £110,000 for home improvements. I'm looking to move home in 18 months. I'm not sure weather to go for fixed rate or not.

I've been offered 3.99% for 12 month and then 5.99% for 24 months but has a £999 fee. What do you reckon?

KiKi

Yes, that's a very good rate, and I'd take it, particularly in this climate. Most mortgages have relatively high fees, and what's a couple of hundred if your rate is 3.99%?! Just be aware that you will need to remortgage again in three years before your rate suddenly soars.

However, if you are going to move in 18 months, and your mortgage is a 36 month term, then chances are that it has penalties associated with it for early repayment. Make sure you check carefully what these penalties are before you commit to a fixed rate that's longer than 18 months. It may well be the case that the penalty might not be worth the rate, and that you're better off hunting down a one year fixed mortgage with a slightly higher rate.

KiKi

MarkyMarkD

3.99% for one year and 5.99% for two is basically similar to 5.33% for three years, which isn't a bad three year rate. And you get the benefit of the saving up front. As KiKi says it's not bad for the fee.

But before being swayed by the 3.99% part of the rate, consider whether you can beat 5.33% for three years with a similar fee.

Gorgeous_George

That's similar to 5.49% for the three years if there was no arrangement fee. With BofE base rate at 5.25%, that's a great rate.

I wouldn't move my tracker to it but it's a great rate nevertheless.

GG

17Dave

If you are looking to move in the next 18 months and do like this stepped deal (as OPs say it is a good deal) ensure it is portable so if you do move there are no penalties. (Usually have to borrow the same or more when you move to avoid penalties.)

Duff_3

Yes it is portable. As long as I stay with them when I move its not a problem. Thx guys, I thought it was a good deal but just needed some re-assurance.