25yr Mortgage & Overpay or 20yr Mortgage?

SPembo

Rob_B wrote:

trying to go with A&L but just found out you can only overpay 10% in jan each year?! how crap!? they have a 4.45% fixed for 5yrs which we want, any similar rates allowing overpayments each month when you want?

I've just paid a visit to a independent advisor over the weekend. Was looking at 95% mortgage, and already had A&L in mind before i went (as its best rate i;d seen). When you looked into it in more depth though, A&L charged a MIG on a 95% mortgage. I think best with no MIG was West Bromwich. The better option was probably nationwide though (fixed), only slightly more expensive but i believe it allows you to overpay upto £500 a month, (was the 4.69 fixed for 2 yrs). Might be worth taking a look at that to give you the flexibility your after.

[edit]Robert also posted about Nationwide while i was typing :E

Rob_B_8

A&L is 4.54% then 5.25 (base rate + .75) fees £660

Nationwide is 4.69% then 5.89 (unsure of what SVR is) fees £619

Hmmm....now im confused!.. Will the daily interest & overpayment chance each month be worth the .15 then .64 % higher rates? I dont know how much that would upto over a year, initially the Nationwide one would be £6month more for me & based on an overpayment of £100/month i dont think Nationwide would be better?

SPembo

Fee's sound approx correct. If you do the key facts thing on a & l site ,see what section 8 gives you, see if they have a MIG. I tried it on borrowing 95% of 100000, which charged you a £1500 MIG, which you could either pay straight off, or have added to the mortgage, thus making it more expensive than Nationwide. It does depends on which mortgage you choose though i guess and how much LTV you will have.

Ian_W

Hi Rob,
According to my calculator [blame it if it's wrong -STUPID CALCULATOR - not me!!] 0.15% difference in interest rates makes £0.125p per month per thousand more to your repayments. Times 12.5p x how many thousands you're borrowing and that should tell you how much more expensive NW is.
Reference the rates after 5yrs - do they really matter? You can switch with no ERP's depending what's available then. NW gives you the ability to overpay each month, which is what you wanted to do, but is slightly dearer, A&L allows it only annually but has slightly higher charges.
Toss-up really, IMHO, cost wise.

Rob_B_8

Well that makes £10.75, if i use egg calc AL is £6 cheaper/month but what is the ability to overpay monthly worth? ie if its less than 0.15% then i'm better off still with AL, if daily interest/monthly OP is worth more than 0.15% NW is best

SPembo

Have you checked them both for Higher Lending Charges though Rob (if it applys to your situation)? That's what makes Netionwide cheaper in my case. (Disregarding the higher SVR as you'd remortgage after the fixed term is up)

Rob_B_8

Got a 10% deposit so we're ok

SPembo

Its 4.99 @ Nationwide on 5yrs fixed (which is looks like your looking for from A % L figures)

Sounds like A&L is your better option probably and invest them overpayments into somewhere else and maybe pay a lump sum at end of fixed term, when you've remortgaged. Of course it all depends how interest rates go etc.

Ian_W

With a 10% deposit NW is 4.69% fixed for 5 yrs - HERE

Rob_B_8

4.99 with 5% deposit, 4.69 with 10%

http://www.nationwide.co.uk/mortgage/homebuyers/rates.htm

EDIT: Beat me to it!