Cheery's country living adventure

Cheery_Daff · 13 July 2019 at 9:49PM

Initial 1 year fix then 4 years discount
[STRIKE]1. Fixed 3.99% for 1 year, then 1.25% discount on SVR for 4 years, APRC 5.35%, £99 fee, monthly payment £1106.26[/STRIKE] - fix too high and not long enough

Initial 2 year fix then 3 year discount
2. Fixed 1.8% for 2 years, then 1.25% discount on SVR for 3 years, APRC 4.87%, £1599 fee, £879.74 monthly - closest to existing but with large upfront fee
3. Fixed 1.81% for 2 years then 1.25% discount on SVR for 3 years, APRC 4.84%, £499 fee, £880.70 monthly - closest to existing with more reasonable fee
4. Fixed 2.01% for 2 years then 1.25% discount on SVR for 3 years, APRC 4.87%, no fee, £900.13 monthly - as above but with no fee

Initial 3 year fix then 2 years discount
5. Fixed 2.01% for 3 years, then 1.25% discount on SVR for 2 years, APRC 4.69%, £499 fee, £900.13 monthly - appealing having a longer fix
6. Fixed 2.15% for 3 years, then 1.25% discount on SVR for 2 years, APRC 4.68%, no fee, £913.88 monthly - appealing having a longer fix, but 5 year fix seems slightly more appealing

5 year fix
7. Fixed 2.06% for 5 years, APRC 4.38%, £1599 fee, £905.03 monthly - maybe...
8. Fixed 2.15% for 5 years, APRC 4.37%, £499 fee, £913.88 monthly maybe...
9. Fixed 2.26% for 5 years, APRC 4.39%, no fee, £926.78 monthly maybe...

10 year fix
10. [STRIKE]Fixed 2.92% for 10 years, APRC 3.72%, no fee, £991.79 monthly[/STRIKE] - Hmm, £100 a month more and who knows what will be going on in 10 years? Not appealing right now.

Variable discount - NOPE!
[STRIKE]11. Discount of 4.39% for 2 years, then discount of 1% for 3 years, APRC 4.8%, £499 fee, £832.34 monthly
12. Discount of 4.27% for 2 years, then discount of 1% for 3 years, APRC 4.17%, no fee, £843.57 monthly
13. Discount of 4.17% for 5 years, APRC 4.17%, £1599 fee, £852.99 monthly
14. Discount of 4.04% for 5 years, APRC 4.18%, £499 fee, £865.35 monthly
[/STRIKE]
Standard variable rate
15. [STRIKE]No fix, no discount, APRC 5.72%, no fee, £1302.31 monthly [/STRIKE]- NO THANKS! :rotfl: :rotfl:

Offset
16. Fixed 2.26% for 2 years, then 1.25% discount on SVR for 3 years, APRC 4.92%, no fee, £926.78 monthly - hmm, didn't realise we could have an offset, will investigate...
17. [STRIKE]No fix, no discount, APRC 5.72%, no fee, £1302.31 monthly[/STRIKE] - nope!

Cheery_Daff · 13 July 2019 at 9:53PM

Well that took forever :rotfl: but it feels good to have it all laid out like that, feels much simpler. So basically we need to decide:

* how long to fix for
* whether to pay an upfront fee
* whether to go for an offset

We've got enough in the current matched betting pot to pay a larger fee if it was going to make the most difference - I'm sure I remember reading on here when we were originally looking that it was best to pay a fee upfront rather than add it to the mortgage so presumably that applies here too.

Must go and re-read Martin's remortgaging guide

Happy with choosing between these options though. I don't feel remotely inclined to go to the open market again given the stress of last time :eek: and our slightly unusual circumstances. Very happy to stay with who we're currently with so just need to make some choices...

Throwaway1 · 13 July 2019 at 10:06PM

Personally, I'd go for a 5 year fix as security is important to me. (We got a mortgage for the first time in Nov and fixed for 10 years with a stupidly ambitious plan to overpay the maximum 10% every year so we'd be finished by the time the 10 year came to an end. Feel free to visit my diary so see how that's going).

We asked ourselves two questions: 1) If we go for a long fix, are we happy paying this amount monthly even if the interest rate somehow drops lower than it currently is? 2) If we go for a short fix and interest rates were to rise by say 5-10% at the end of it, could we cope with the new forced payments that would bring?

On balance, we would much rather potentially overpay (as in waste, not 'Overpay') a few quid a month than be in a situation where we couldn't afford the repayments and default.

Cheery_Daff · 13 July 2019 at 10:34PM

Ok, done some messing around with calculators etc (goodness me I LOVE this website) :money:

Offset
Doesn't really make sense for us given our relatively low savings compared to the cost of the mortgage

:rotfl: Over 2 years (the max length of the offset fix) we'd actually pay £1500 MORE in an offset (I've allowed or a 1.5% savings rate, as our higher accounts don't take that much anyway, and assumed we'll have £400 extra a month fro MB, which isn't always necessarily the case). Interesting - in my head I always thought offsets were always great but apparently not necessarily in our case.

Length of fixed rate
Hmm, sadly the fixed mortgage comparison calculator doesn't seem to be working right now so I'll check that tomorrow.

Leaning towards a longer fix right now though, especially given that the exit fee is only £199... (although I have a vague feeling there's a difference between exit fees and early repayment fees?! Can't see any mention of two separate things though on the options). Feel more comfortable with 5 years rather than 10, but might check that on the fixed rate calculator when it's, er, fixed :rotfl:

Interestingly, I just changed our overpayments spreadsheet so the interest rate was 2.06% (rather than the current 1.8%) for the rest of the life of the mortgage - and it seems to suggest our mortgage will be paid off in December 1899 :eek: :rotfl: :rotfl: :rotfl: That would be nice, wouldn't it?!

Methinks there may be a small error in my accounting somewhere

:rotfl: :rotfl:

Karmacat · 13 July 2019 at 10:37PM

That's a lot of work to get them sorted like that, well done Cheery. Some of those upfront fees are huge though! Dear me **faints**

Can I ask about the discounts after the fix ends? Options 2 - 6: actually, its in your notes already, the discount is on the SVR. What are you leaning towards, after letting all that work sink in?

Cheery_Daff · 13 July 2019 at 10:46PM

Hmm - spreadsheet seems to suggest that the given monthly payments at the interest rate I put in won't actually pay the mortgage off in time...

.... which made me suspicious, so I've gone back to check and all the options suggest we'd be starting the 25 year time again :eek: Which presumably they won't let us do anyway as that will take Mr Cheery to being over 80, which was their initial cut off :eek:

Gosh I SO do not want to have to go down the 'ringing for advice' route - not given the list of things it wants to know from you :eek:

Oh, and I just checked the MSE list of mortgages and there are quite a few 2 year fixes at 1.39%... YAWN. Wonder how much of a difference that few percent would make... (I suppose that's easy enough to find out :rotfl: ) But will they also lend til Mr Cheery is ancient, and on all our land, which were the sticking points before?

YAWN YAWN YAWN. I was all excited at working it out and now I am just BORED

:rotfl:

Will come back tomorrow when the calculator is working

Cheery_Daff · 13 July 2019 at 10:50PM

Ha KC - I think I actually pre-empted your question and answered it while you were typing :rotfl:

Cheery_Daff · 13 July 2019 at 11:24PM

As for upfront fees - yes, massive :eek: But given that we were probably going to pay that much in MB overpayments over the next couple of months anyway, it might be best just to do it like this (because otherwise that fee is effectively added on to the mortgage and we pay interest on it).

Done some snooping on the policies of the other best options according to the MSE mortgage finder

All 2 year fixed

Coventry
Fixed 1.39%, APRC 4.2%, £1007 fee, £829 monthly
No mention of limits on land, but max age 75

Santander
Fixed 1.39%, APRC 3.6%, £1034 fee, £829 monthly
Will lend up to 10 acres (fine - that's the same as now), but max age 75

HSBC
Fixed 1.41%, APRC 3.8%, £1529 fee, £831 monthly
No mention of limit on acres, will lend to 80

Barclays
Fixed 1.42%, APRC 3.8%, £1034 fee, £832 monthly
Doesn't mention limits on land, assess on individual basis for age, but should be fine given proof of pension and my income

Lloyds
Fixed 1.43%, APRC 3.8%, £1034 fees, £833 monthly
No mention of limits on acres, will lend to 80

Platform (part of Co-op apparently, never heard of them)
Fixed 1.44%, APRC 4.4%, £999 fees, £834 monthly
Up to 3 acres, only up to 75

Ok, that's enough for tonight. Will do some calculations tomorrow to see if it's worth going to a broker (a different one!! :eek: :eek: ) to sort out one of these cheaper deals.

Right now it feels like I'm happy to pay a certain price not to have to go through all the uncertainty and nonsense again

But we'll see

Cheery_Daff · 14 July 2019 at 8:58AM

Throwaway1 wrote: »

Personally, I'd go for a 5 year fix as security is important to me. (We got a mortgage for the first time in Nov and fixed for 10 years with a stupidly ambitious plan to overpay the maximum 10% every year so we'd be finished by the time the 10 year came to an end. Feel free to visit my diary so see how that's going).

We asked ourselves two questions: 1) If we go for a long fix, are we happy paying this amount monthly even if the interest rate somehow drops lower than it currently is? 2) If we go for a short fix and interest rates were to rise by say 5-10% at the end of it, could we cope with the new forced payments that would bring?

On balance, we would much rather potentially overpay (as in waste, not 'Overpay') a few quid a month than be in a situation where we couldn't afford the repayments and default.

:hello: sorry Throwaway, I missed you in amongst all my ramblings there!

Good to see you

I will indeed pop by your diary to see how you're doing with your plans - I hope it's splendidly :A

Your questions are excellent ones of course :j

1. Are we happy paying that amount for a longer fix even if rates drop? Our 5 year fix would be 2.06% (if we pay the upfront fee), while the 2 year fix is 1.8% - doesn't feel like that much of a difference but I'll have to get the calculator out again (yawn).

I also need to find out for definite what the early repayment charges are as that will make a HUGE difference - technically the '2 year fix' is actually 2 years at a fixed rate, then 3 years of discount - and if we're stuck in THAT with a massive penalty I will NOT be impressed :eek:

I kind of think rates can't really drop THAT much from 2%ish... Although the alternatives seem to be 1.39% which is a bit lower I suppose. My sister thought the same and fixed for 10 years at about 6% though so I'm slightly wary :eek: :eek:

2. If we go for a short fix and interest rates were to rise by say 5-10% at the end of it, could we cope with the new forced payments that would bring?
Hmm. The standard variable rate that we'll revert to at the end of this fix is 5.69% (I think) which increases our monthly payments by over £400 :eek: And that's only an increase from 1.8%. You're right - I would NOT be happy if we had to revert to that in 2 years time.

It's difficult isn't it? A lot can happen in 2 years! And even more can happen in 5 years :eek: We can manage our payments at what they are now comfortably (and overpay a teensy bit, and a lot more with the MB income).

We would definitely be struggling if our monthly payment increased to £1300, that's over half my income :eek:

Hmm, this is all really helpful folks :kisses3: thank you for chipping in :j

Cheery_Daff · 14 July 2019 at 9:11AM

Main decisions seem to be (and I WILL shut up at some point, I promise

)

Do we want to stay with our current provider?
Yes
* can do online
* barely any paperwork or speaking to anyone
* already have mortgage with them so no uncertainty around assessment of income/valuation etc
* perfectly happy with service (although I do wish they would let you manage it online!)

No
* rates a bit more expensive than elsewhere (1.8% for the 2 year fix compared to 1.39%; 2.06% for 5 year fix compared to 1.75%)

Do we want to move to a different provider?
Yes
* rates cheaper (although of course no guarantee that we'd actually get them!)

No
* aaarrggghhhh, not sure I can face the fiasco of providing proof of everything
* aaargggghhhh, not sure I can face the uncertainty of a valuation again (and also our building work is not finished yet

it's not anything prohibited of course, but it doesn't look very good right now!)
* we'd probably want to go through a broker but how to find a reliable one after being badly burned last time?

How long do we want to fix for?
2 years
* cheapest rates, especially if we switch (but see above)
* BUT - 2 year fix deal might actually be a 5 year fix/discount deal depending on early repayment charges - need to find these out (but couldn't see a way of doing that through the website)

5 years
* slightly more expensive - need to work out how much
* certainty for the next 5 years (by which time we'll have paid off much more, I'll be earning more, and things won't feel as tight as they do now)
* no faffing around going through this process again for 5 years (which I confess is appealing!)
* BUT - I suppose there's a (very small) chance we might want to move in the next 5 years (although obviously I'm never moving house again after last time :rotfl: ) - a longer fix will mean possibly paying more to get out of it I suppose, but I think we can deal with that if it happens. Apparently it's usually eg 1%, which would at this point be £2000, so that's something we could absorb into house moving costs in the unlikely event that we DID want to move in the next 3 or 4 years.

Right this is all REALLY helpful. Very much leaning towards 5 year fix with current people. Need to go away and do some calculations to make sure it's not going to cost us massively. Need to talk to Mr Cheery too, although rather suspect he'll be happy with whatever I'm happy with after all this calculating

:rotfl:

Cheery's country living adventure

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