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    • shads1973
    • By shads1973 13th Apr 18, 8:19 PM
    • 90Posts
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    shads1973
    Remortgage -5 or 10 year?
    • #1
    • 13th Apr 18, 8:19 PM
    Remortgage -5 or 10 year? 13th Apr 18 at 8:19 PM
    Evening people,

    Being a friday evening what better time then to look at a remortgage and some advice/feedback. Saw a broker yesterday who provided some deals, maybe just looking for some sanity check on leaning towards peace of mind of a 10 year deal or other things I need to take into consideration

    Anyway some feedback. Current mortgage is a libor + 2.05% deal (mortgage is interest only and been in place for 11 years)..so at around 2.82% on a 250k mortgage we have a monthly payment of 591 (well next quarterly update is around this figure)

    Current house is approx worth 400k. We have a lump sum/surplus cash of 100k we will use to reduce our mortgage to around 150k

    10 year fixed @ 2.49% giving a monthly repayment of 672.14. Product has a 999 arrangement fee

    5 year fixed @ 2.08% giving a monthly repayment of 641.64
    Product has no arrangement fee


    30 a month for peace of mind of knowing where we are is on the face of it the only decision possibly at this stage? Not missing anything else?
Page 1
    • leon103
    • By leon103 13th Apr 18, 10:01 PM
    • 722 Posts
    • 173 Thanks
    leon103
    • #2
    • 13th Apr 18, 10:01 PM
    • #2
    • 13th Apr 18, 10:01 PM
    I would go with the 5 year fixed. No expert in the market and interest rates but lower interest and no fee is a positive. Plus if rates don't rise you are better off
    • DCFC79
    • By DCFC79 13th Apr 18, 10:21 PM
    • 32,547 Posts
    • 20,479 Thanks
    DCFC79
    • #3
    • 13th Apr 18, 10:21 PM
    • #3
    • 13th Apr 18, 10:21 PM
    Id go for the 5 year myself.
    • getmore4less
    • By getmore4less 14th Apr 18, 5:12 AM
    • 33,050 Posts
    • 19,926 Thanks
    getmore4less
    • #4
    • 14th Apr 18, 5:12 AM
    • #4
    • 14th Apr 18, 5:12 AM
    LTV 150/400 37.5% should access good rates.

    With those numbers full term is 25 years

    in 5y adding the fees and paying the same 672pm

    150,999 @ 2.49% 672pm 128,107
    150,000 @ 2.09% 672pm 123,973

    over 5 years the real cost is 4,134 or 68.90pm

    There are better rates (<2.0%) on 5y which you might be eligible for.
    Quite a few have very high fees even with 1,500 the 1.84% can still work(just).

    eg. First direct
    5y
    150,490 @ 1.84% 672 122,781 (490 fee worth paying)
    150.000 @ 1.94% 672 122,962

    the fee/rate break even over the 2.09% no fee is

    2.003% 500
    1.927% 1000
    1.851% 1500


    For 10y 2.49 seems the going rate it's finding one with lower fees
    FD have 10y 2.49% no fee.

    That's just the product fees you have to factor in any other costs that will be different between lender and other features of the deal like ERC and overpayments.
    • shads1973
    • By shads1973 14th Apr 18, 12:08 PM
    • 90 Posts
    • 11 Thanks
    shads1973
    • #5
    • 14th Apr 18, 12:08 PM
    • #5
    • 14th Apr 18, 12:08 PM
    LTV 150/400 37.5% should access good rates.

    With those numbers full term is 25 years

    in 5y adding the fees and paying the same 672pm

    150,999 @ 2.49% 672pm 128,107
    150,000 @ 2.09% 672pm 123,973

    over 5 years the real cost is 4,134 or 68.90pm

    There are better rates (<2.0%) on 5y which you might be eligible for.
    Quite a few have very high fees even with 1,500 the 1.84% can still work(just).

    eg. First direct
    5y
    150,490 @ 1.84% 672 122,781 (490 fee worth paying)
    150.000 @ 1.94% 672 122,962

    the fee/rate break even over the 2.09% no fee is

    2.003% 500
    1.927% 1000
    1.851% 1500


    For 10y 2.49 seems the going rate it's finding one with lower fees
    FD have 10y 2.49% no fee.

    That's just the product fees you have to factor in any other costs that will be different between lender and other features of the deal like ERC and overpayments.
    Originally posted by getmore4less

    Thanks for the replies people

    Should have said that the quotes were on a 25 year term. Thanks for providing real figures breakdown. Based on that 5 years does seem the logical choice. Think with our advancing years the fear is what employment we'd be in 5/10 years when we came to look at another remortgage

    Most of the best buy tables did show sub 2% mortgage rates, so assumed maybe they were out of date or we didnt meet criteria when our "whole of the market" advisor presented the best deal at slightly above this rate

    Heard FD mortgages can be particularly hard to obtain?
    • getmore4less
    • By getmore4less 14th Apr 18, 12:23 PM
    • 33,050 Posts
    • 19,926 Thanks
    getmore4less
    • #6
    • 14th Apr 18, 12:23 PM
    • #6
    • 14th Apr 18, 12:23 PM
    if you pick a lender with good record of retention deals then that becomes the fall back is circumstances change a bit.

    Which lenders are the potential deals with?
    • dimbo61
    • By dimbo61 14th Apr 18, 6:08 PM
    • 10,011 Posts
    • 5,404 Thanks
    dimbo61
    • #7
    • 14th Apr 18, 6:08 PM
    • #7
    • 14th Apr 18, 6:08 PM
    So what is the plan to pay off 150,000 when you are 5 or 10 years older than now ?
    • getmore4less
    • By getmore4less 14th Apr 18, 6:57 PM
    • 33,050 Posts
    • 19,926 Thanks
    getmore4less
    • #8
    • 14th Apr 18, 6:57 PM
    • #8
    • 14th Apr 18, 6:57 PM
    So what is the plan to pay off 150,000 when you are 5 or 10 years older than now ?
    Originally posted by dimbo61
    ????
    They are looking at 25y repayment to replace the exiting debt.
    • shads1973
    • By shads1973 14th Apr 18, 9:04 PM
    • 90 Posts
    • 11 Thanks
    shads1973
    • #9
    • 14th Apr 18, 9:04 PM
    • #9
    • 14th Apr 18, 9:04 PM
    if you pick a lender with good record of retention deals then that becomes the fall back is circumstances change a bit.

    Which lenders are the potential deals with?
    Originally posted by getmore4less
    Mortgage Express current lender (appreciate this probably doesn't matter much)

    Leeds Building Society is the 5 year deal

    Coventry Building Society is the 10 year deal

    The 10 year deal has no ERC from 5+ years onwards of the mortgage term, so if our circumstances are still good and better deals available the lure was we had the option of switching. And should the economy/interest rates for whatever reason have gone up more then most people seem to think/predict, we'd have the security of another 5 years

    Either way obviously both products provide a better interest rate then what we're on now, and it doesn't apprear interest rates will drop that will make the current mortgage attractive (plus a new mortgage puts us on a repayment method. That's about as much logic I've tried to apply in deciding with product to take)
    Last edited by shads1973; 14-04-2018 at 9:06 PM.
    • Thrugelmir
    • By Thrugelmir 14th Apr 18, 9:40 PM
    • 59,787 Posts
    • 53,126 Thanks
    Thrugelmir
    10 year fix will give you peace of mind. Over that time frame mortgage interest rates are going to normalise. Personally I'd take a shorter mortgage term than 25 years to take advantage of what's on offer. With 15 years left you'd still have a significant mortgage debt to repay.
    Financial disasters happen when the last person who can remember what went wrong last time has left the building.
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