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  • FIRST POST
    • Beck1980
    • By Beck1980 13th Apr 18, 5:34 PM
    • 4Posts
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    Beck1980
    Remortgate or not
    • #1
    • 13th Apr 18, 5:34 PM
    Remortgate or not 13th Apr 18 at 5:34 PM
    Greetings all

    I currently have a 24 year 40,000 mortgate with halifax.
    Fixed at 2.4% for 4 years.- owned the house for 1 year.

    I also have a 24,000 loan with natwest at 13%.- 8 years remaining.
    Natwest have asked if i wished to remortgage with them and add the loan to the value - roughly to 63,000.

    I currently pay 174 pcm mortgage & 420 pcm for my loan.
    If i add the loan to the mortgage it will bring my monthly payments down to around the 250 pcm. I have not spoken to natwest mortgage advisor as of yet. I thought i would ask for some advice on MSE first.
    The repayment fee is 1,500 if i pay halifax the full amount back.

    Any advice or comments greatly appreciated.

    Thanks
Page 1
    • getmore4less
    • By getmore4less 14th Apr 18, 7:24 AM
    • 33,629 Posts
    • 20,342 Thanks
    getmore4less
    • #2
    • 14th Apr 18, 7:24 AM
    • #2
    • 14th Apr 18, 7:24 AM
    Halifax have poorer rates for small mortgages.

    In effect they penalise loyalty by charging you more as you pay off your loan..

    Retention rate for a 5y fix <60% LTV
    <100k 2.89%
    <250k 2.54%
    >250k 2.34%


    What's your LTV?

    Anyway

    40,000 2.4% 4 years with ERC of 4%(ish) 1,500

    To recover the fee over 4 years you need a rate of

    40000 2.400% 174pm 35,269
    41500 1.378% 174pm 35,269

    you won't find a lender that has rates that low.

    Natwest 5y 60% LTV no fee seems to be 2.97% which is very high.

    If you are going to change lenders you might as well look for one with better rates.

    looking at your loan as well over the 4 years of the 8.
    24000 @ 13% 420pm 13,996

    adding them together(65,500) and a payment of 595 the new loan over 4 years to break even needs to get down to 49,265

    65,500 5.33% 595 49,272

    plenty of lender with rates below that.

    you still need to look at the best rate you could get for the loan and keep the mortgage you have 13% is high there should be lower options and even a 0%CC shuffle could be better than consolidation.


    -------------------------------------
    40,000 @ 2.4% over 24years is 183pm
    24,000 @ 13.0% over 8 years is 403pm

    As there is some rounding in your numbers the real calcs will be a little different but you should get the idea.


    ---------------------------
    obvious question

    why now and not a year ago when you were looking at the new mortgage?
    • Beck1980
    • By Beck1980 14th Apr 18, 9:09 AM
    • 4 Posts
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    Beck1980
    • #3
    • 14th Apr 18, 9:09 AM
    • #3
    • 14th Apr 18, 9:09 AM
    Thanks for the reply

    I got my mortgage on a right to buy.
    London & country broker found halifax as the best RTB option.
    House value was 80000 with approx 48% discount.
    So i have 40 ish in the house as equity/ value.

    I dont think i would be able to 0% the loan onto a cc, maybe due to the amount.
    I would just like to reduce the monthly outgoings of mortgage 174 & loan 420.
    Im just not sure if adding the loan to my mortgage would be the best option.

    Natwest obv want my mortgage to make money from it. I just dont want to pay over the odds if i do so.

    Thank you
    • dimbo61
    • By dimbo61 14th Apr 18, 10:33 AM
    • 10,100 Posts
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    dimbo61
    • #4
    • 14th Apr 18, 10:33 AM
    • #4
    • 14th Apr 18, 10:33 AM
    Why did you take out a 24,000 loan ?
    If you went with NatWest you could save money by overpaying every month so you are paying out the same amount you are currently paying .
    However it might take a year of overpaying just to repay the ERC and other costs to change lenders.
    • dimbo61
    • By dimbo61 14th Apr 18, 10:38 AM
    • 10,100 Posts
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    dimbo61
    • #5
    • 14th Apr 18, 10:38 AM
    • #5
    • 14th Apr 18, 10:38 AM
    You have a good rate with Halifax and security for the next 4 years.
    How much was the rent you paid each month ?
    If you can stick with your current lender and mortgage deal and keep on repaying the mortgage and loan every month.
    In 4 years time you can remortgage the whole of your debt into a new mortgage.
    • Beck1980
    • By Beck1980 14th Apr 18, 10:53 AM
    • 4 Posts
    • 0 Thanks
    Beck1980
    • #6
    • 14th Apr 18, 10:53 AM
    • #6
    • 14th Apr 18, 10:53 AM
    The loan was for a car, and home improvements.
    I have an appointment with a mortgage advisor from natwest.
    If i was to put the loan onto my current mortgage, what would be a good %.
    • getmore4less
    • By getmore4less 14th Apr 18, 11:46 AM
    • 33,629 Posts
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    getmore4less
    • #7
    • 14th Apr 18, 11:46 AM
    • #7
    • 14th Apr 18, 11:46 AM
    Needing 65,500 on 80k property that's 82% LTV you could do part of the loan to get your LTV under 80%

    A decent 5y fix rate on 80% would be under 2.5%

    natwest 5y rates

    85% 3.38%
    80% 3.17%
    75% 3.05%
    70% 3.03%
    60% 2.97%

    but then it is not the mortgage that is the problem it's the loan,

    Can you release equity on the RTB this soon?

    what will Halifax charge for extra borrowing that will save the 1,500 ERC so you can take a higher rate and still be better off.

    The mortgage is not the problem its the loan.
    • Beck1980
    • By Beck1980 14th Apr 18, 3:36 PM
    • 4 Posts
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    Beck1980
    • #8
    • 14th Apr 18, 3:36 PM
    • #8
    • 14th Apr 18, 3:36 PM
    Yes i can use equity in my RTB, i did wonder this myself. I just pay a % of discount if i sell within 5 years ( which i wont be doing ).

    Would getting a 24k lower rate loan, to pay of the 24k 13.9% loan be a good option ?
    This i guess will lower overall interest but am i just adding fuel to the fire.
    Im not struggling, i just want to get a good deal.

    Thanks
    • dimbo61
    • By dimbo61 14th Apr 18, 5:45 PM
    • 10,100 Posts
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    dimbo61
    • #9
    • 14th Apr 18, 5:45 PM
    • #9
    • 14th Apr 18, 5:45 PM
    Well putting up 80% LTV mortgages on google comes up with a list of lenders.
    Now Yorkshire Building Society has a 85% LTV 5 year fix at 2.06% fee 495.
    If you borrowed 65,000 ( 63,000 plus 1,500 plus 495 Fee ) you would be paying about 286 a month.
    I have No idea if you would get a mortgage with YBS or what your income, age, savings, credit score etc
    If you can remortgage it would save you paying 13% on a Loan but PLEASE overpay every month !!!
    Set up the Direct debit at say 500/550 a month for the next 5 years if you can get the mortgage
    Good Luck
    PS this is not advice and you may well get a better deal with a mortgage broker
    Last edited by dimbo61; 14-04-2018 at 5:51 PM.
    • getmore4less
    • By getmore4less 14th Apr 18, 6:51 PM
    • 33,629 Posts
    • 20,342 Thanks
    getmore4less
    Yes i can use equity in my RTB, i did wonder this myself. I just pay a % of discount if i sell within 5 years ( which i wont be doing ).

    Would getting a 24k lower rate loan, to pay of the 24k 13.9% loan be a good option ?
    This i guess will lower overall interest but am i just adding fuel to the fire.
    Im not struggling, i just want to get a good deal.

    Thanks
    Originally posted by Beck1980
    Just wondering why you ended up with a mortgage and a 13% loan just a year after the RTB

    if it is affordable there is no fire it's about getting lower rates on any of your debt to pay it off quicker and crunching numbers with the cash flow you have or if you want to spend more a lower cash flow and keep the debt over a longer term.

    The cheapest money available is 0% on Zero fee or spend cards.


    have you got a proper budget on how you want to distribute your income over hte next 5 years?

    You need to do that before you look at restructuring your debt.
    • Old Git
    • By Old Git 15th Apr 18, 1:50 AM
    • 4,322 Posts
    • 3,752 Thanks
    Old Git
    get the loan onto a lower rate .If you add it to the mortgage you may get a lower rate but it them becomes a secured long term loan.
    "Do not regret growing older, it's a privilege denied to many"
    • getmore4less
    • By getmore4less 15th Apr 18, 5:50 AM
    • 33,629 Posts
    • 20,342 Thanks
    getmore4less
    what I don't understand is why the 24k is on 13% as there are plenty of lenders with good rates.


    Doing some more numbers to give an idea what the high rate and low rate over longer term cost.

    24,000 13% 420pm interest 13,618

    if you can get a rate of say 5% and pay the same
    24,000 5% 420pm interest 3,468

    that's a massive saving

    if you pay less (make it around 8 years)

    24,000 5% 305pm interest 5,143

    115pm to spend but ends up costing nearly 1,700 extra interest

    spread it out over 24 years on the mortgage

    24,000 5% 144pm interest 17,060

    that's more than it costs now.

    A lot of loans are limited to 5y representative rates around 3%

    24k 3% 5y is 431pm interest 1,874
    Last edited by getmore4less; 15-04-2018 at 6:20 AM.
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