Remortgage Virgin seeks help !

raybush

I am shortly coming to the end of a 3 year 5.49% capped deal with the Yorkshire Building Society. My current monthly payments are £563.41 and my outstanding loan is £69,267 approx, of which £35,000 is endowment linked.

I have received their notification letter telling me I will be moving on to a variable rate of 6.60% >:(

As a result of accessing this website, I have decided to launch myself into trying to establish a better deal going forward, however I am finding it all somewhat complex and confusing, with all the comparison tables, the fees etc.

I have taken the first step as advised in checking with my current provider to see if they can better their offer, and below is their offerings.

Option 1 - 2 years fixed rate @ 5.34% with £395 fees

Option 2 - 3 years fixed rate @ 5.15% with £495 fees

Option 3 - 2,3,or 5 years fixed rate @ 5.69% no fees.

All the above options are flexible (can have overpayments) upto 99% of mortgage.

Option 4 - Tracker 2 years BOE + 0.15% £395 fees

option 5 - Tracker 2 years BOE + 0.55% no fees

Both these options are flexible and have no-tie ins even during the defined period.

The issue is this..... I don't know if these are good or bad, compared to any other options available. I also am unsure how risky a tracker mortgage is, and is it best to pay the fee up-front or add to the mortgage...

As you can appreciate I have already been stung with the endownment and don't want to make another major mistake.

Confussed and desperate ???

Please help

Robert_Sterling_3

They all look good relative to paying 6.6%.

abomb1969

Check out https://www.egg.com, no fees or costs to get one, flexible option, no get out costs, only costs you £25 for the electornic transfer fee. Its about the best deal you can get that I can find with no tie ins, just remortgage again in 6 months and "rate tart", if you find a better deal in the next 6 months then go for it! They told me that they were not in the business of short term mortgages, but with this offer they cant stop you from departing elsewhere when you have taken advantage of the introduction period.

A discounted rate of 4.24% variable for the first six months (1.5% discount off the Tracker Variable Rate) followed by ...

A Tracker Variable Rate of 0.99% above Bank of England Base Rate after that (Tracker Variable Rate currently 5.74%).

The overall cost for comparison is 5.8% APR.

Incredibly flexible; no tie ins, make overpayments and take payment breaks.

Option to offset your savings against your mortgage by opening a special Egg Savings Account.

MarkyMarkD

I am shortly coming to the end of a 3 year 5.49% capped deal with the Yorkshire Building Society. My current monthly payments are £563.41 and my outstanding loan is £69,267 approx, of which £35,000 is endowment linked.

I have received their notification letter telling me I will be moving on to a variable rate of 6.60%  >:(

As a result of accessing this website, I have decided to launch myself into trying to establish a better deal going forward, however I am finding it all somewhat complex and confusing, with all the comparison tables, the fees etc.

I have taken the first step as advised in checking with my current provider to see if they can better their offer, and below is their offerings.

Option 1 - 2 years fixed rate @ 5.34% with £395 fees

Option 2 - 3 years fixed rate @ 5.15% with £495 fees

Option 3 - 2,3,or 5 years fixed rate @ 5.69% no fees.

All the above options are flexible (can have overpayments) upto 99% of mortgage.

Option 4 - Tracker 2 years BOE + 0.15% £395 fees

option 5 - Tracker 2 years BOE + 0.55% no fees

Both these options are flexible and have no-tie ins even during the defined period.

The issue is this.....  I don't know if these are good or bad, compared to any other options available. I also am unsure how risky a tracker mortgage is, and is it best to pay the fee up-front or add to the mortgage...

As you can appreciate I have already been stung with the endownment and don't want to make another major mistake.

Confussed and desperate   ???

Please help

The tracker rates are relatively competitive given that they are flexible (and YBS calculate interest daily too).

As for the trade-off between paying the fee and not doing, it depends on your balance.

You say your balance is £69,267.

So, the 0.40% difference between the two tracker rates comes to £280 per annum (approx) or £560 over two years. So it's cheaper for you to pay the £395 and get the lower rate. The same applies for anyone with a loan over £50,000 approx.

A tracker mortgage is "safer" than a normal discount, as the rate is determined by the independent Monetary Policy Committee rather than made up by the lender.

But it's less "safe" than a fixed rate, as the payments can increase ... but of course, so can they decrease.

The benefit of taking a product from your existing lender is that you save the hassle and (potentially) cost of remortgaging.

I can't see why you'd switch to the Egg deal suggested above, given that the YBS tracker deals are flexible and you would only pay 4.89% over 2 years (on the £395 deal) compared to (1/4 x 4.24% + 3/4 x 5.74% = ) 5.365% over 2 years with Egg.

You can get 2 year discount products elsewhere for around 4.44% but it's debatable whether it's worth the effort of switching. I think to get a rate that low, you'd have to pay valuation fees and legal costs of switching so probably around £600 as well as the product fee (like £395) on top. That £600 is equivalent to almost 0.50% per annum (over 2 years) based on your relatively small mortgage.

DebtEverest

I am in the same position as the original poster. My current mortgage with YBS is due for renewal, and I was a bit annoyed by their notification letter telling me that the two products they chose to tell me about were not the most attractive on offer.

I ended up going for the 3 yrs fixed at 5.15, with refund of evaluation fee (additional borrowing) and the fee added to the mortgage, which probably isnt the best thing to do.

I didnt really want to have to remortgage with a different provider and pay lots of fees that would cancel out any gain made in a change of interest rate.

When I too did the sums, the 3 yrs fixed with fee, still made me better off (only by about £230 than with the rate with no fees - and this was on a sum of £66,000.

Hope you get what you want :-/