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  • FIRST POST
    • bubblycrazy
    • By bubblycrazy 13th Jul 17, 12:11 AM
    • 151Posts
    • 442Thanks
    bubblycrazy
    Is it worth me remortgaging?
    • #1
    • 13th Jul 17, 12:11 AM
    Is it worth me remortgaging? 13th Jul 17 at 12:11 AM
    Hi, I'm currently on a 5 year fix of 4.79% which ends 31/10/2019. The ERC is currently 4%, but decreases by 1% every year on the 31/10. The standard monthly payment is 259.69 and I also OP another 100 each month.
    The last valuation was 62500 and the remaining balance is 47999, however I would pay the extra to get the LTV to 75%.

    I am trying to work out if it is worth remortgaging. My current provider can do fee free 2yr fix for 2.73% and a 5yr fix for around 3%. Ideally I would like to find something for less, but as a worse case scenario would this still be worth doing?
    I would still keep my payments at 359.69 so more of it would be an OP than the current 100. Does this help make it worthwhile?
    Would I be better off waiting until the ERC goes down to 3%?

    If you need any more info let me know, thanks.
    MFW - Original balance 28/08/2014 52850
    Original MF date: 2049 Aiming for: 2025
    Balance 28/04/2015 52250
    Balance 27/07/2016 49990
    Balance 08/07/2017 47999
Page 1
    • getmore4less
    • By getmore4less 13th Jul 17, 6:09 AM
    • 31,880 Posts
    • 19,103 Thanks
    getmore4less
    • #2
    • 13th Jul 17, 6:09 AM
    • #2
    • 13th Jul 17, 6:09 AM
    add the fees make the payments the same and see whats left at the key dates. 31 OCt 17(3month) and 31Oct 19(27month)

    first comparison is til ERC drops to 3%
    Erc now @4%, 1920

    47,999 @ 4.79% 360pm 47,392 + ERC@3% 48,814
    49,919 @ 2.73% 360pm 49,178

    not worth switching now 300 down in 3 months

    in 3 months your comparison over the next 2 years becomes.

    47,392 @ 4.79% 360pm 43,098
    48,814 @ 2.73% 360pm 42,680
    • bubblycrazy
    • By bubblycrazy 13th Jul 17, 10:44 AM
    • 151 Posts
    • 442 Thanks
    bubblycrazy
    • #3
    • 13th Jul 17, 10:44 AM
    • #3
    • 13th Jul 17, 10:44 AM
    Thanks, so it would be worth it in 3 months time but would only save 300?
    What about the fact that the current payment overpays by 100 each month but the newer payment would be a 175 overpayment.
    Would the second option not knock more years off the mortgage, as more of the money is coming off the capital?
    I would pay the ERC straight away and not add it to the mortgage.
    MFW - Original balance 28/08/2014 52850
    Original MF date: 2049 Aiming for: 2025
    Balance 28/04/2015 52250
    Balance 27/07/2016 49990
    Balance 08/07/2017 47999
    • getmore4less
    • By getmore4less 13th Jul 17, 3:15 PM
    • 31,880 Posts
    • 19,103 Thanks
    getmore4less
    • #4
    • 13th Jul 17, 3:15 PM
    • #4
    • 13th Jul 17, 3:15 PM
    Paying the fee up front makes a tiny difference.

    If you wait till the ERC drops to 3% you save about 400 over the next 2 years.
    • Boredatwrork
    • By Boredatwrork 13th Jul 17, 4:04 PM
    • 828 Posts
    • 1,903 Thanks
    Boredatwrork
    • #5
    • 13th Jul 17, 4:04 PM
    • #5
    • 13th Jul 17, 4:04 PM
    "however I would pay the extra to get the LTV to 75%.
    Why dont you pay the extra now and anything else you can afford. The quicker its in the more you save overall.

    Once that payment is made and cleared call you bank ask what they takes your LTV to and your current balance (many banks can tell you this straight over the phone), then see where you are.

    You maybe closer to 65% or 60% than you think which opens up the best deals (some which are fee free) and it may just be worth holding on until then.

    Use a Mortgage calculator to work out when you will roughly hit the right LTV, if you have a smart phone theres a really app one called Karl's mortgage calculator for free, and does the number crunching for you.


    My current provider can do fee free 2yr fix for 2.73% and a 5yr fix for around 3%. Ideally I would like to find something for less
    Here you go..

    Yorkshire building society are currently doing:

    85% all fee free-
    2 year 2.14%
    3 year 2.30%
    5 year 2.63%

    75% all fee free-

    2 year 1.82%
    3 year 1.99%
    5 year 2.39%

    They also do a 65% for the best deals if you can get there.
    Last edited by Boredatwrork; 13-07-2017 at 4:35 PM.
    • getmore4less
    • By getmore4less 13th Jul 17, 4:58 PM
    • 31,880 Posts
    • 19,103 Thanks
    getmore4less
    • #6
    • 13th Jul 17, 4:58 PM
    • #6
    • 13th Jul 17, 4:58 PM
    Why dont you pay the extra now and anything else you can afford. The quicker its in the more you save overall
    Originally posted by Boredatwrork
    paying 4% now rather than 3% in 3months needs a rate of arount 1.2% to break even over the 3 months.
    • Boredatwrork
    • By Boredatwrork 13th Jul 17, 5:01 PM
    • 828 Posts
    • 1,903 Thanks
    Boredatwrork
    • #7
    • 13th Jul 17, 5:01 PM
    • #7
    • 13th Jul 17, 5:01 PM
    paying 4% now rather than 3% in 3months needs a rate of arount 1.2% to break even over the 3 months.
    I was talking about overpayments, the original poster said they would make up the difference, they may have some cash behind the sofa, that could be put to good use
    • bubblycrazy
    • By bubblycrazy 15th Jul 17, 1:43 PM
    • 151 Posts
    • 442 Thanks
    bubblycrazy
    • #8
    • 15th Jul 17, 1:43 PM
    • #8
    • 15th Jul 17, 1:43 PM
    Thanks for the responses.

    Why dont you pay the extra now and anything else you can afford. The quicker its in the more you save overall.

    Yorkshire building society are currently doing:

    85% all fee free-
    2 year 2.14%
    3 year 2.30%
    5 year 2.63%

    75% all fee free-

    2 year 1.82%
    3 year 1.99%
    5 year 2.39%
    Originally posted by Boredatwrork
    I can't really afford to get it to 75% right now, that was taking into account the next 3 months of normal payments as well.
    I also don't know if i will pass the affordability tests to move to a new lender, I may have to take what my current lender offers.

    What about the fact that the current payment overpays by 100 each month but the newer payment would be a 175 overpayment.
    Would the second option not knock more years off the mortgage, as more of the money is coming off the capital?
    Originally posted by bubblycrazy
    Am I wrong looking at it this way? If I put the figures into an overpayment calculator, it looks as though I pay off 2500 more this way.
    46875 (balance for 75% LTV) at 260pm plus 100 OP, balance in 2 years 43210
    46875 at 185 plus 175 OP, balance in 2 years 40699
    Minus the ERC, I would have saved 1100
    That is keeping my term the same with 32 years remaining.
    Last edited by bubblycrazy; 15-07-2017 at 2:17 PM.
    MFW - Original balance 28/08/2014 52850
    Original MF date: 2049 Aiming for: 2025
    Balance 28/04/2015 52250
    Balance 27/07/2016 49990
    Balance 08/07/2017 47999
    • getmore4less
    • By getmore4less 15th Jul 17, 7:13 PM
    • 31,880 Posts
    • 19,103 Thanks
    getmore4less
    • #9
    • 15th Jul 17, 7:13 PM
    • #9
    • 15th Jul 17, 7:13 PM
    Thanks for the responses.


    I can't really afford to get it to 75% right now, that was taking into account the next 3 months of normal payments as well.
    I also don't know if i will pass the affordability tests to move to a new lender, I may have to take what my current lender offers.


    Am I wrong looking at it this way? If I put the figures into an overpayment calculator, it looks as though I pay off 2500 more this way.
    46875 (balance for 75% LTV) at 260pm plus 100 OP, balance in 2 years 43210
    46875 at 185 plus 175 OP, balance in 2 years 40699

    Minus the ERC, I would have saved 1100
    That is keeping my term the same with 32 years remaining.
    Originally posted by bubblycrazy
    If the total payment is the same and the rate is the same the end result should be the same.
    • bubblycrazy
    • By bubblycrazy 15th Jul 17, 10:43 PM
    • 151 Posts
    • 442 Thanks
    bubblycrazy
    If the total payment is the same and the rate is the same the end result should be the same.
    Originally posted by getmore4less
    The rate isn't the same. Sorry should have put the first calculation was at the original 4.79%, the second calculation is for 2.73%
    MFW - Original balance 28/08/2014 52850
    Original MF date: 2049 Aiming for: 2025
    Balance 28/04/2015 52250
    Balance 27/07/2016 49990
    Balance 08/07/2017 47999
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