Journey to a mortgage free future

labradorlove · 5 February 2019 at 2:29PM

Right, ok, so

Contacted Santander to look at what new rates they're offering, we're going to go for a 5 year fixed rate instead of 2 years this time to be on the safe side because of Brexit. Our 2 year fixed rate at 2.21% ends on 02/06/2019

Our options to stay with Santander

5 Years fixed at 2.39% (no fee)

or

5 years fixed at 2.19% (£999 fee)

I'm a bit disappointed, I thought the more we pay off, the lower the interest rate would be, these are the options as they said they upped the value on our house from £135,000 to £156,000, so we're down as having a 75% LTV now which is good but just disappointed that even if we want to reduce the interest rate by 0.02% we'd have to pay a £999 fee. I've been looking on money supermarket and they're all working out at very similar rates with product fees but my fear with moving providers and remortgaging is that it won't be valued at £156,000 and that they'd offer higher rates. Stuck at the minute and got some thinking to do, been comparing on MSE mortgage comparison and the differences are around £500 max between all the ones I've found so looks like we'll probably be sticking with Santander, at least we don't have to pay the extra £900 we were going to pay to get us to 85% LTV if we're already down at 75%. Although DF has already paid £250 of overpayments so I'll match that on pay day.

Feeling deflated

Feeling the weight of this huge chunk of debt that doesn't appear to be going anywhere!

Why can't a long lost wealthy uncle just show up out of the blue and come and pay off my mortgage, it's daylight robbery!!

labradorlove · 5 February 2019 at 3:00PM

kev2009 wrote: »

Hi labradorlove,

Congrats on the promotion and great to hear you will be in the 85% LTV come June 2019! Must feel good! Will you being doing a new SOA now or updating your previous SOA?

Will wait to her how things come when you renew your fixed term mortgage in June! Will give me some ideas on how to do mine next year

Kev

Hi Kev

Thank you

I am going to do a new SOA in July as I want to wait until the April pay rise and my increment increase have been added

Hope you're well

kev2009 · 6 February 2019 at 6:31PM

Hi,

Yes not bad thanks, yourself?

Interesting read, I see the interest rates haven't move that much form your 2.19%, i was expecting them to have gone up to 2.5% at least. Comforting to know

With regards to 2.39% or 2.19%, i'd look at how much extra you would be paying over the 5 years at 2.39% and then see does it add up to £999 or more and then decide is it worth it? In some ways might be better to go for the 2.39% as, if I understand correctly, the £999 gets added when you take it out and then it in turn attracts interests which will be added to the mortgage. So I suspect this will work out more than if you took the 2.39% mortgage with no fees as nothing is added to the mortgage and you just pay a little bit more each month.

When i got my mortgage, i fixed for 5 years and I too went for the loan with the £999 fee simply because they had already said they could add it to the mortgage so i figured why now, i owe soo much already whats an extra £999 but now i'm working on reducing it, I don't want to see a sudden increase so would likely try and go for fee free mortgage if possible when i get to there in 2020. Also having just put down deposit etc, i needed to start building up some money so thought just add it for now.

Kev

hovehouse · 11 February 2019 at 11:04AM

Found this thread because, being just six months in to my first ever (30-year!) mortgage, I'm already thinking about trying to bring that mortgage-free date closer and so have signed up to the forum for inspiration! Being someone who has taken out a mortgage at a time of 'historic low' interest rates, I'm already terrified every time interest rate increases are mentioned in the news... Will be following this diary and cheering you on from the starting line of this very long marathon!

Elise1912 · 13 February 2019 at 1:42PM

Good luck with it all! You lot have inspired me to do the same. I would LOVE to be mortgage free by the time I'm 50!

davidquizer · 28 February 2019 at 12:07PM

Well done to you. I paid off my mortgage in November, that was 15 years early! I overpaid for many years and the way I look at it is I've saved 15 years of interest. Always check your statement and when the loan starts reducing because of your overpayment its a fabulous feeling and will encourage you.

Roxie · 2 March 2019 at 9:47AM

kev2009 wrote: »

Hi,

With regards to 2.39% or 2.19%, i'd look at how much extra you would be paying over the 5 years at 2.39% and then see does it add up to £999 or more and then decide is it worth it? In some ways might be better to go for the 2.39% as, if I understand correctly, the £999 gets added when you take it out and then it in turn attracts interests which will be added to the mortgage. So I suspect this will work out more than if you took the 2.39% mortgage with no fees as nothing is added to the mortgage.

Kev

Totally agree with this, I am also on a 5 year fix and chose the fee free option, I calculated the extra few £s a month (I think it was a difference of around £5 a month for me) for the 60 monthly payments over 5 years of the fix came nowhere close to the £999 fee. Use the bank's online calculators for an idea of the difference you would pay each month and decide from there what is best for you.

GCW · 9 March 2019 at 5:58PM

Would like to partake in this thread if I may

I am 6 years into a 25 year mortgage and it's remortgage time again. I always look around for rates but it's always so difficult to know if you are getting the truly best deal out there.

I'm with Nationwide. 1.09% fixed coming to an end in June. £152k left on the mortgage. LTV is around 50%.

I prefer the security of a fixed rate. Nationwide are offering £1.59% for a 2 year fix, 1.74% for a 3 year fix and 1.89% for a 5 year fix.

Like a previous poster has said, it's disappointing when you see the rate go UP as you work through your mortgage but I suppose the markets are different at different times.

Rather annoyingly, the last time I remortgaged I got to the very end of the process and signed up for 1.19% only for Nationwide to then lower it to 1.09% at the very last moment - would have saved a lot of hassle/reserach if they had offered that up first time!

Any advice on this process? Can I relaistically save decent money by swicthing provider?

labradorlove · 10 April 2019 at 1:29PM

You're probably more of an expert on that front than me, I remortgaged to start from June 2019 and my % has gone up from 2.21% to 2.39%, so £510 a month fixed for the next 5 years.

We've overpaid £500 so far this year, we're having a month off this month but from next month £100 each to pay. I'm desperate to get under the 100k mark!!!

kev2009 · 19 April 2019 at 12:42PM

Hi,
Have you re-checked the mortgage rates? I see Santander are doing a 2.14% 5 year fixed with 0 fee, maybe you can switch to that? It's based on 75% LTV also which I believe you have?

Maybe worth checking?

Kev

Journey to a mortgage free future

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