Remortgage confusion!

pr65

This is my first post on the site and I hope someone will be able to give me some good advice...no pressure!

My 5yr fixed rate mortgage is coming to an end next month and I've been looking for deals for another fixed rate mortgage. I've not been able to find any that compare with an offer my existing lender, Alliance and Leicseter, gave me at 6.24%. I only have a £37,000 remaining so even with lower interest rates when you've taken into account the booking fees and exit fee from A&L I don't really save much for moving lenders.

To add to my confusion I've just been on the One Account website who can allegedly reduce my mortage term from 7 years down to 2 years 6 months I understand the principle of how there account works but don't know if anyone who has used them so am slightly dubious by their claim and wondered if anyone had used them.

In short should I stick with my current lender, make further enquiries with the One Account or go for a few months on the standard variable rate in the hope some new mortgage deals are realeased in the next few monhts??!!

Thanks for taking the time to read my post :money:

TartanWarrior

the ofset mtg with first direct is very good if you have savings.

basicly you link the mtg to your other accounts and the interest you get in those acc goes to reducing the mtg interest.

in effect if you have a 37,000 mtg and 37,000 in a savings acc, then you do not pay interest on the mtg, reducing the term, although you don't get the interest on your savings.

wait a couple of months if you can, because as soon as they get through the backlog and the hsbc offer ends they will be reducing their rates again

wymondham

With the size mortgage you have, and the likely high fee's you'll have elsewhere compare to the small mortgage, the One Account could work for your situation provided you are disciplined and can overpay, and ideally have savings you can also put into the account. It will also help with it's very low fee's, and not having to remortgage again (with the fee's!), which could be a problem with such a small mortgage. They do however have a minimum amount (I can't recall the figure - sorry!), so you may need to get this minimum amount, then make a bulk payment on day 2 to get the desired effect - this is what I did, they are quite happy with this. There are lots of posts on the One Account that you can see how others have used it - this one explains all angles quite well:

http://forums.moneysavingexpert.com/showthread.html?t=587535

The interest rate you are likely to have if you have up to 50% LTV is 6.35%, so not much difference to your current rate, with the size mortgage you have. You'll also be in a good position to get rid of the mortgage quickly if you can overpay - probably not quite as fast as their calulator says as it assumes an ideal scenario, but probably quicker than you would otherwise due to the way it operates.

A Few questions:

What is the value of your house?
What is your current mortgage payment, and is it interest only/repayment?
What fee's/costs do you have with moving away from A&L?
What is your take home pay, and how much remains after all bills paid?
Do you have any savings, and can you make any lump payments?
Where do you currently have your current account?
Do you ever go overdrawn? (if you do then One Account is a big no no!)

Have a read through the One Account posts and make your own mind up once you're sure you know how it works and if you think it's appropriate for you and the way you handle your finances. Good Luck!!