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  • FIRST POST
    • CashStrappedTeen89
    • By CashStrappedTeen89 11th Oct 18, 10:35 PM
    • 306Posts
    • 314Thanks
    CashStrappedTeen89
    Few mortgage questions
    • #1
    • 11th Oct 18, 10:35 PM
    Few mortgage questions 11th Oct 18 at 10:35 PM
    That time ago to renew our existing 1.99% 2 year fixed deal.
    I just wondered if someone would offer a few words of wisdom.

    1) we desperately need the rendering on our house replacing estimates have come in between 5-8K based on type or render used, would it be wise to add this on the mortgage or take a personal loan?.

    2) we currently have £111,000 left with 20 year term, is it better to stick at 20 and overpay or lower the term and pay more?. We pay £550 at the moment if I go to £600 I can lower the term to 17 years.

    3) Were looking at a fixed term just for peace of mind it suits us better, so far HSBC seems to be the best to go with, can anyone recommend anywhere better to check?. Iím realistically after a 3+ fixed deal. We bank with Halifax, Lloyds and Nationwide at the moment.

    Many thanks
Page 1
    • butterflybook
    • By butterflybook 12th Oct 18, 8:52 AM
    • 76 Posts
    • 18 Thanks
    butterflybook
    • #2
    • 12th Oct 18, 8:52 AM
    • #2
    • 12th Oct 18, 8:52 AM
    for the small amount you are looking to borrow if you can secure a low rate personal loan this may be the better option as adding it to the mortgage will repay it over a much longer time period meaning paying interest on that amount.

    Adjusting the term is whatever you feel comfortable with you could do either and it would have the same result

    Who you bank with will have no bearing on a mortgage application - Have you seen a broker to determine the best deal? Which isn't always the best interest rate

    The likes of Halifax, Lloyds and Nationwide wont be leading the way on interest rates currently
    I am a Mortgage Broker
    You should note that this site doesn't check my status as a Mortgage Broker, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
    • CashStrappedTeen89
    • By CashStrappedTeen89 12th Oct 18, 6:45 PM
    • 306 Posts
    • 314 Thanks
    CashStrappedTeen89
    • #3
    • 12th Oct 18, 6:45 PM
    • #3
    • 12th Oct 18, 6:45 PM
    Haven’t seen a broker yet, being honest I went to two when I first got my current mortgage and actually found better ones myself in the end.
    • tonycottee
    • By tonycottee 12th Oct 18, 8:04 PM
    • 1,132 Posts
    • 2,133 Thanks
    tonycottee
    • #4
    • 12th Oct 18, 8:04 PM
    • #4
    • 12th Oct 18, 8:04 PM
    Personally I would opt for a longer term mortgage with a smaller monthly payment. Then I would try to overpay every month as much as I could. If there’s a month or 2 where I need some extra cash, I just wouldn’t overpay.
    • CashStrappedTeen89
    • By CashStrappedTeen89 14th Oct 18, 7:28 PM
    • 306 Posts
    • 314 Thanks
    CashStrappedTeen89
    • #5
    • 14th Oct 18, 7:28 PM
    • #5
    • 14th Oct 18, 7:28 PM
    Personally I would opt for a longer term mortgage with a smaller monthly payment. Then I would try to overpay every month as much as I could. If thereís a month or 2 where I need some extra cash, I just wouldnít overpay.
    Originally posted by tonycottee
    Any particular reason why Tony?. Where comfortable with the amount we pay at the moment so just checking itís for no other reason.
    • anniecave
    • By anniecave 14th Oct 18, 8:41 PM
    • 2,246 Posts
    • 730 Thanks
    anniecave
    • #6
    • 14th Oct 18, 8:41 PM
    • #6
    • 14th Oct 18, 8:41 PM
    People manage their mortgage in different ways. Some people like a lower monthly payment then chose to overpay. The amount that can be overpaid varies, some products only allow say 10% of the value in a year, others can allow lots more. If overpayments are allowed this can give real flexibility.

    You alternatively could just set something that's comfortable for you and then each time you renew/switch then re-assess how much you can afford to pay to work out what term you need each time.

    Some people have a spreadsheet going working out how much interest they are saving by paying early, how many days this will reduce their mortgage by etc to make it a challenge to pay it off as quickly as possible. Seeing the numbers change can be a motivator for people who like to be a data geek!
    Indecision is the key to flexibility.
    • Samsung_Note2
    • By Samsung_Note2 14th Oct 18, 9:08 PM
    • 605 Posts
    • 256 Thanks
    Samsung_Note2
    • #7
    • 14th Oct 18, 9:08 PM
    • #7
    • 14th Oct 18, 9:08 PM
    for the small amount you are looking to borrow if you can secure a low rate personal loan this may be the better option as adding it to the mortgage will repay it over a much longer time period meaning paying interest on that amount.

    Adjusting the term is whatever you feel comfortable with you could do either and it would have the same result

    Who you bank with will have no bearing on a mortgage application - Have you seen a broker to determine the best deal? Which isn't always the best interest rate

    The likes of Halifax, Lloyds and Nationwide wont be leading the way on interest rates currently
    Originally posted by butterflybook
    Can you share your opinion who is...to late for me hopefully as remortgaging with Halifax,assuming it all goes through,5 yrs fixed @1.96%.
    If my appalling spelling offends you that much...dont read my posts.
    • Thrugelmir
    • By Thrugelmir 14th Oct 18, 9:49 PM
    • 60,081 Posts
    • 53,424 Thanks
    Thrugelmir
    • #8
    • 14th Oct 18, 9:49 PM
    • #8
    • 14th Oct 18, 9:49 PM
    Where comfortable with the amount we pay at the moment so just checking itís for no other reason.
    Originally posted by CashStrappedTeen89
    "At the moment" being the operative words. How much capacity do you have to absorb financial shocks in the future? The most obvious one being the more recent unique period. Low interest rates may seem normal, but they aren't.
    Financial disasters happen when the last person who can remember what went wrong last time has left the building.
    • Zero Sum
    • By Zero Sum 14th Oct 18, 10:47 PM
    • 536 Posts
    • 430 Thanks
    Zero Sum
    • #9
    • 14th Oct 18, 10:47 PM
    • #9
    • 14th Oct 18, 10:47 PM
    Keeping the term longer & lower payments, then overpay the extra that you wouldve done by reducing the term allows greater flexibility should you ever be a bit short that month.

    And instead of overpaying straight off, id be making use of 5% regular savers.
    • Sanne
    • By Sanne 14th Oct 18, 10:57 PM
    • 396 Posts
    • 342 Thanks
    Sanne
    We also opted for a longer term with lower rates and will overpay as we can. That way, we have the flexibility to pay less if we need to - in two ways, by underpaying what we have overpaid if things ever get really desperate (obviously after agreeing this with the lender!), or by choosing to not overpay. Based on our current situation we could have easily afforded a shorter term but I like to have options (I don’t get company sick pay for example so a bad flu could mean significant loss of income in a month).
    • getmore4less
    • By getmore4less 15th Oct 18, 4:33 AM
    • 33,264 Posts
    • 20,086 Thanks
    getmore4less
    for the small amount you are looking to borrow if you can secure a low rate personal loan this may be the better option as adding it to the mortgage will repay it over a much longer time period meaning paying interest on that amount.

    Adjusting the term is whatever you feel comfortable with you could do either and it would have the same result

    Who you bank with will have no bearing on a mortgage application - Have you seen a broker to determine the best deal? Which isn't always the best interest rate

    The likes of Halifax, Lloyds and Nationwide wont be leading the way on interest rates currently
    Originally posted by butterflybook
    Unless they can find a rate lower than the mortgage better to up the mortgage and overpay.
    • getmore4less
    • By getmore4less 15th Oct 18, 4:37 AM
    • 33,264 Posts
    • 20,086 Thanks
    getmore4less
    BEWARE

    Halifax retention deals are tiered on loan size smaller loan higher rate.

    particularly bad as you drop under £100k
    • CashStrappedTeen89
    • By CashStrappedTeen89 15th Oct 18, 6:27 PM
    • 306 Posts
    • 314 Thanks
    CashStrappedTeen89
    Have around 2-3 months for rainy periods. I can see the benefit of the longer term. I’ll look st the differences and work out the overpayment option. See which would be better value.
    • getmore4less
    • By getmore4less 15th Oct 18, 6:57 PM
    • 33,264 Posts
    • 20,086 Thanks
    getmore4less
    Have around 2-3 months for rainy periods. I can see the benefit of the longer term. Iíll look st the differences and work out the overpayment option. See which would be better value.
    Originally posted by CashStrappedTeen89
    If the total payments are the same there is no difference.

    All the initial terms does is set a contractual payment.


    With savings in reserve you can save money with longer terms and overpayments.
    you dip into your saving to overpay a lot at the start of the ERC year then top savings up from income with what would have been regular overpayments.

    on 2% £100pm or £1200 in month one saves around £12
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