Alliance & Leciester overpayments

Dunkwho

Its remortgage time and I'm looking around for best rate deals to be had (the A&L and britannia rates are looking favorite). I went through the A&L key facts illustration yesterday and was shocked to read that they only allow 1 penalty free overpayment per year (in january) - if you've look in the same places can you confirm that I've read that correctly or have I miss interpretted somewhere? Our nationwide 2yr fixed is coming to an end, we've been able to overpay each month for quite a while now and would be looking for a similarly flexible mortgage this time too.

Cheers
Duncan

will-in-estoril

You can make an overpayment in January each year equivalent to 10% of your outstanding mortgage, and it is capitalised straight away.

However, you can make an additional payment of £499 each month, and it is credited at the end of that month.

Monthly payments DO count towards the 10% per year.

An example: your mortgage balance is £100,000. Your overpayment allowance is therefore £10,000. If you were to make six overpayments of £499 (=£2994), you would be able to make a payment of (£10,000-£2994=£7006) in January.

Whilst this is some way from being a flexible mortgage it will suit where there might be a few hundred pounds going spare each month. The rates are market leading at the moment, as A&L have been one of the first to drop their fixed rates.

If you get an illustration from them it should be valid 28 days, irrespective of whether or not they withdraw the product in the interim, which would give you chance to see what other lenders do, before and after the B of E MPC decision early October, and in reaction to any change in the swap rates.

payless

some good rates, need to balance off some strange overpay conditions & fees against their competitive rates

Have you considered NW "renewal rates" ? ( rtaes might not be as good, but may have less in fees - when taking everthing into accont ,and often less hassle) - to many brokers/ sites seem to overlook ( or can't include) this option in their comparisons

Not sure about quote being valid for 28 days - deals can and are often withdrawn without notice , until full application is lodged

Rob_B_8

A&L seem to charge 3% if you overpay except in Jan, thats how i read it anyway, cant find my KFI right now but i've gone with them anyway, 4,44% not bad!

Dunkwho

Thats the bit ... the 3% charge for non Jan overpayments.
Britannia have 4.39 5yr fixed, can't remember what hitches I found with that one ...

I've looked at NW's rates, 4.39 2yr 4.69 5yr aren't bad ... taking the BT 4.39 would save me around £2k over the 5 yrs given my 150k outstanding mort more than offsetting the cost to move.

payless

fair enough , on the larger mortgages , a small % can make up the fees, especially on the longer term deals

Conrad

Dunkwho wrote:

Its remortgage time and I'm looking around for best rate deals to be had (the A&L and britannia rates are looking favorite). I went through the A&L key facts illustration yesterday and was shocked to read that they only allow 1 penalty free overpayment per year (in january) - if you've look in the same places can you confirm that I've read that correctly or have I miss interpretted somewhere? Our nationwide 2yr fixed is coming to an end, we've been able to overpay each month for quite a while now and would be looking for a similarly flexible mortgage this time too.

Cheers
Duncan

As a broker I often advise people not to remo due to something that everyone (including the FSA) overlook; INTERIM INTEREST.

When you remo both your existing lender and the new one charge interim interest which can add - up to as much as c6 weeks payments. When you also take account of fees (including often unforssen closing costs such as deeds release fee), remortgaging is often inappropriate.

Staying with your existing lender and changing deal will avaoid some costs and interim interest.

The above is particularly pertinent for those with smaller loans, say under £80000 for example.

payless

Conrad wrote:

As a broker I often advise people not to remo due to something that everyone (including the FSA) overlook; INTERIM INTEREST.

When you remo both your existing lender and the new one charge interim interest which can add - up to as much as c6 weeks payments. When you also take account of fees (including often unforssen closing costs such as deeds release fee), remortgaging is often inappropriate.

Staying with your existing lender and changing deal will avaoid some costs and interim interest.

The above is particularly pertinent for those with smaller loans, say under £80000 for example.

Fees- agree, as per my previous posts

Interim Interest ? -
Yes does come into play for purchases or increased loan amounts but for more strightforward remortgage swaps - surely this is more of a cashflow thing ( which can be covered with correct forward planning on chooising the correct amount to remtg) than cost , as in most cases interest is charged daily to a set date by the old lender, and then daily from that date by the new lender ( not unusual for an extra payment to go thro' to old lender before completion , as well as new lender then asking for money - caused by solicitor redemption statement being forwarded calculated, but not allowing for any scheduled payment in the interim but usually refunded automatically by solicitor or ex-lender)

(oK in some cases you get a couple of days , if solicitor does not rely on CHAPS)
can have an effect if previous lender charged in arrears and new lender in advance - although mostly ( but not all ) this is again be a timing/ cashflow situation

Dunkwho

hang on hang on hang on ... what in the name of all that's holy are you guys on about !! ??

Intermin interest, interim ... charged by both the old and new lenders ... whats going on there ?

We've started looking with a couple of months to go before the existing mort runs out, cleary we realise that if we don't get a new offer lined up to start on the day that our existing offer runs out then we'll fall back to NW's SVR. Is that what you're talking about, or are you talking about something else? What, then, is the deal with the new lender charging interim interest - again we expect to have everything in place in good time and expect to just move to the new rate on the start date.

Surely thats all there is too it? Old rate runs out, move to SVR or new remort if its all setup to hand over on the day, pay any (days) worth of extra SVR interest, then be paying our new remort payments as soon as it kicks in (ideally no gap).

You've worried me now ! (can you tell?)

Duncan

payless

if you read my post , you will see , I am saying that its not an extra cost
( just make sure you remtg the right amount, or might end up a shortfall)

Hannah_Lam

Hiya
Just read your thread about remortgaging as we're coming close to the end of our 2 yrs fixed rate mortgage. We were too looking at the Alliance & Leicester 4.19% and still deciding whether or not to go for it. We're currently with YBS at 4.19% fixed but they said to us that if we switched to their latest fixed rate product we would still need to pay around £600-£700 fees !! Seem extortinate doesn't it so we've kinda decided to shop around but not really sure what to look for ie any hidden charges etc.