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  • FIRST POST
    • darrenwis
    • By darrenwis 3rd Nov 18, 4:24 PM
    • 96Posts
    • 3Thanks
    darrenwis
    Fixing Mortgage - Which of these deals?
    • #1
    • 3rd Nov 18, 4:24 PM
    Fixing Mortgage - Which of these deals? 3rd Nov 18 at 4:24 PM
    Hi all,

    We have 110,000 left on our mortgage with Nationwide and our fix has come to an end. After looking around a bit we are going to stick with Nationwide and just change the product.

    Probably looking at a 2 or 3 year fix (heading towards a 3 year)

    Our options would be:

    A). 3 Year Fix - 2.09% - No product fee - 419 a month - Balance left after 3 years - 101,690

    B). 3 Year Fix - 1.79% - 999 product fee added to loan - 407 a month - Balance left after 3 years - 102,235

    C.) 2 year Fix - 1.99% - No product fee - 414 a month - Balance left after 2 years 104,485

    D). 2 year Fix - 1.59% - 999 product fee added to loan - 396 a month - Balance left after 2 years - 105,085

    We want fixed term for some peace of mind during Brexit etc and can't afford the product fee up front. We are a family of 4, 2 and a half year old and a new born.

    Any advise or recommendations on the above? Which would you go for A, B, C or D?

    Thank you in advance.

    Darren
    Last edited by darrenwis; 03-11-2018 at 10:00 PM.
Page 1
    • FIRSTTIMER
    • By FIRSTTIMER 3rd Nov 18, 6:37 PM
    • 402 Posts
    • 62 Thanks
    FIRSTTIMER
    • #2
    • 3rd Nov 18, 6:37 PM
    • #2
    • 3rd Nov 18, 6:37 PM
    This is interesting - I am in a similar position with First Direct with a mtg circa 140k. Most have advised me to look at taking out the 2 yr fixed which is around 1.79% as the interest I accrue is going to be much less than taking out a 2.2% 3/5 yr over the two years. However, I have noticed that metro bank have a 5 year fix with a 499 fee at 2.04% which I am VERY tempted to go for.....as I think in another two years we will be looking at rates circa 2.5% at average LTV values.
    • getmore4less
    • By getmore4less 3rd Nov 18, 6:38 PM
    • 33,472 Posts
    • 20,228 Thanks
    getmore4less
    • #3
    • 3rd Nov 18, 6:38 PM
    • #3
    • 3rd Nov 18, 6:38 PM
    The 3 year deal is close but no fee is better.
    Max you can save on the lower rate is 990 if you were interest only.

    2y max is 880


    You can't cover the fee.
    • FIRSTTIMER
    • By FIRSTTIMER 3rd Nov 18, 6:38 PM
    • 402 Posts
    • 62 Thanks
    FIRSTTIMER
    • #4
    • 3rd Nov 18, 6:38 PM
    • #4
    • 3rd Nov 18, 6:38 PM
    I think product fees around 1k are not good either - I use this website in addition to money facts to gauge what I end up paying in total over the fixed period. Quickly realised fee products are a non starter for me unless the fee is circa 500 MAX
    • Somerset La La La
    • By Somerset La La La 3rd Nov 18, 7:20 PM
    • 613 Posts
    • 195 Thanks
    Somerset La La La
    • #5
    • 3rd Nov 18, 7:20 PM
    • #5
    • 3rd Nov 18, 7:20 PM
    Out of that lot I'd go 3 years @ 2.09%, agree with above RE: fees - only worth it if you have a large mortgage. I think on some examples I did with work, 1k fee was best for over 200k.

    Also if you do see a decent product fee deal (I doubt it on 110k, but maybe possible if good incentives are provided) and you can't afford it upfront, consider adding it to the mortgage and then overpaying in say 6 months to knock the fee off the balance and stop paying interest on it.

    That way you've effectively got yourself the fees product (which MAY be better for you) and just borrowed the fee @ say 2% for 6 months. Credit repair are more known for crazy fees (1,495 etc!) so that "trick" can really help with affordability
    • dimbo61
    • By dimbo61 3rd Nov 18, 7:30 PM
    • 10,071 Posts
    • 5,451 Thanks
    dimbo61
    • #6
    • 3rd Nov 18, 7:30 PM
    • #6
    • 3rd Nov 18, 7:30 PM
    You are trying to compare apples and pears.
    IE 2 year deals and 3 year deals ?
    We have No idea of your circumstances or type of property, completely different ( Views ) if it was a studio apartment or 3 bed house with garden.
    London or Leeds, planning family or happy single.
    You need to look at the Big picture !
    A newly married couple who Need the security of a 5 year fix with 2 kids planned in the next 2/3/4 years
    OR young professional buying first property with plans to move up every 2/3 years.
    • darrenwis
    • By darrenwis 3rd Nov 18, 9:05 PM
    • 96 Posts
    • 3 Thanks
    darrenwis
    • #7
    • 3rd Nov 18, 9:05 PM
    • #7
    • 3rd Nov 18, 9:05 PM
    Ok some more info, we have a 3 bed semi detached in Wales.

    Family of 4, 2 and a half year old and a new born.

    Does that help at all?
    • darrenwis
    • By darrenwis 3rd Nov 18, 9:07 PM
    • 96 Posts
    • 3 Thanks
    darrenwis
    • #8
    • 3rd Nov 18, 9:07 PM
    • #8
    • 3rd Nov 18, 9:07 PM
    The 3 year deal is close but no fee is better.
    Max you can save on the lower rate is 990 if you were interest only.

    2y max is 880


    You can't cover the fee.
    Originally posted by getmore4less
    Ok, so are you saying the 3 year fix with no fee would be the better deal for me?

    Thanks,
    D
    • dimbo61
    • By dimbo61 4th Nov 18, 9:28 AM
    • 10,071 Posts
    • 5,451 Thanks
    dimbo61
    • #9
    • 4th Nov 18, 9:28 AM
    • #9
    • 4th Nov 18, 9:28 AM
    Again planning Darren.
    In 3 years your oldest will be 5 and at school so little if any childcare costs.
    However the youngest will be 3 so maybe childcare costs and your other half working part-time !
    If you have no plans to move ? And family nearby to help with children then maybe consider 5 year deals !
    What is the difference in Interest rates between 3 and 5 year deals
    • dimbo61
    • By dimbo61 4th Nov 18, 9:41 AM
    • 10,071 Posts
    • 5,451 Thanks
    dimbo61
    Had a quick look on Nationwide website and I don't know your LTV but they have a 5 year fix at 2.19% with No fee.
    Both kids would at school in 5 years and IF ? you have No plans to move you have security for the next 5 years.
    Hopefully your LTV should be under 60% by then
    I took out a 5 year deal back in 2005 at a mortgage rate of 4.74% but with 3 kids we needed the security at the time ! Overpaid every month to reduce the debt and become Mortgage Free as fast as we could afford to.
    Your decision after consulting the Boss ��
    • darrenwis
    • By darrenwis 4th Nov 18, 11:28 AM
    • 96 Posts
    • 3 Thanks
    darrenwis
    Thanks for the replies.

    We would possibly be looking to move in the next 5years as our house is certainly becoming crowded. But not sure if anything would happen with the next 3 years.

    In terms of ours children, no family close so it
    Would be school and childcare for the youngest which is why I was considering the 3 year fix.

    LTV is 65% at present.
    • Thrugelmir
    • By Thrugelmir 4th Nov 18, 12:15 PM
    • 60,994 Posts
    • 54,194 Thanks
    Thrugelmir
    We would possibly be looking to move in the next 5years as our house is certainly becoming crowded. But not sure if anything would happen with the next 3 years.
    Originally posted by darrenwis
    Mortgages can be ported. Don't let a potential move sway your decision. For peace of mind a 5 year fix is the safe option. The risk with shorter term fixes is that interest rates may well have risen by the time a new product is sought. Any benefit now may be wiped out totally in the future.
    Financial disasters happen when the last person who can remember what went wrong last time has left the building.
    • xyz123
    • By xyz123 4th Nov 18, 12:27 PM
    • 1,582 Posts
    • 381 Thanks
    xyz123
    IMHO, if you are planning to move then don't look at 5 year fixed. Mortgage may be portable but it doesnt guarante that it will be transferred. If you.move then new property, loan amount, affordability will still be fully checked and if for some reason they don't want to land on new property you maybe left with early repayment charge. On one side you are saying you can't afford, 995 mortgage fee upfront even if it saves you money on it (by not putting it on loan) so affordability when you move to a bigger (most likely more expensive house may not be a done deal....
    • getmore4less
    • By getmore4less 4th Nov 18, 1:05 PM
    • 33,472 Posts
    • 20,228 Thanks
    getmore4less
    Paying fees up front saves money is a myth.(it's a tiny saving)

    The cost comparison is done based on if you have the money or not.
    • darrenwis
    • By darrenwis 4th Nov 18, 1:11 PM
    • 96 Posts
    • 3 Thanks
    darrenwis
    Overall, it was showing up as 38 more expensive paying fees upfront.

    We've gone for 3 year fix no fee.

    Who knows if we've done the right thing.
    • Thrugelmir
    • By Thrugelmir 4th Nov 18, 1:58 PM
    • 60,994 Posts
    • 54,194 Thanks
    Thrugelmir
    We've gone for 3 year fix no fee.

    Who knows if we've done the right thing.
    Originally posted by darrenwis
    If the product meets your current circumstances and gives you peace of mind. Then it's right. Impossible task trying to second guess future events which aren't even yet on the radar.
    Financial disasters happen when the last person who can remember what went wrong last time has left the building.
    • dimbo61
    • By dimbo61 10th Nov 18, 5:28 PM
    • 10,071 Posts
    • 5,451 Thanks
    dimbo61
    If you plan on moving to a bigger house in the next 2/3/5 years then overpay what ever you can each month.
    Will reduce your debt and increase the equity for the next home which Just might give you a better LTV when you do move
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