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  • FIRST POST
    • Wrath_of_Kain
    • By Wrath_of_Kain 9th May 19, 8:52 PM
    • 29Posts
    • 3Thanks
    Wrath_of_Kain
    Mortgage Crossroads
    • #1
    • 9th May 19, 8:52 PM
    Mortgage Crossroads 9th May 19 at 8:52 PM
    Hi Yall,

    Currently at a cross roads and not 100% sure what to do.

    I have 11 years left currently on a BOE +1.25% tracker =>@ 2% currently on the main mortgage with some additional mortgage tied in on an SVR of 4.24%.

    I saw this product recently:

    https://mortgages.firstdirect.com/mortgage-rates/product/10-year-fixed-repayment-fee-saver-20-24

    I put the figures for the First Direct into a mortgage calculator and it still spits out roughly what i am currently paying now -5.

    Thinking even withstanding not actually saving much at least my payments will not go up for at least 10 years and with the SVR exposure is something that could probably climb quickly.

    I am tempted to lock into one of these long terms which will get me close to the end of my mortgage and with Brexit imminent might be a prudent choice.

    I assume from a re-mortgaging perspective the only fee is the booking fee and my redemption administration fee with current provide (110)

    Any opinions or advice on what you think i should do etc. gratefully received
Page 1
    • Thrugelmir
    • By Thrugelmir 9th May 19, 9:58 PM
    • 63,105 Posts
    • 56,023 Thanks
    Thrugelmir
    • #2
    • 9th May 19, 9:58 PM
    • #2
    • 9th May 19, 9:58 PM
    Remortgaging to a new lender may well incur valuation and legal fees as well. Which could erase much of the benefit of switching. Overpay the higher borrowing on the SVR. Likewise while rates are low take the opportunity to make hay by funding some savings from within your budget. Debt only has to be repaid once. The interest savings will snowball.
    "'The mistakes we make as investors is when the market's going up, we think it's going to go up forever. When the market goes down, we think it's going to go down forever. Neither of those things actually happen. Doesn't do anything forever. It's by the moment.'" - John Bogle
    • Wrath_of_Kain
    • By Wrath_of_Kain 10th May 19, 7:20 AM
    • 29 Posts
    • 3 Thanks
    Wrath_of_Kain
    • #3
    • 10th May 19, 7:20 AM
    • #3
    • 10th May 19, 7:20 AM
    Thanks Thrugelmir
    As far as I am aware there are no fees:

    https://mortgages.firstdirect.com/mortgage-rates-fees/fees

    VALUATION
    "As part of the mortgage process for residential properties, we will conduct a Standard Valuation free of charge. The current fee for Homebuyer Reports and Building Surveys for residential property valuations, including VAT (UK only), are detailed below. This may be subject to change without notice. If you choose to have a Homebuyers Report or Buildings Survey in addition, the following fees apply:"

    LEGAL FEES
    "If you are changing the owner(s) of the property you're Remortgaging you will need to pay for the associated legal costs that come with this.

    Where the mortgage and property will both continue to be in the same names and the property will be your main residence, we will prepare the legal documentation. This means that there will be no basic solicitors costs for you to pay. However you will not have any legal representation unless you arrange and pay for it yourself.

    If you are transferring your mortgage to first direct from another mortgage provider, they may charge an Early Repayment Charge if you are moving during a fixed rate or "tied-in" period."

    There is no ARRANGEMENT or BOOKING Fee ...... I think the only fee is 115 for the early repayment admin fee with the existing mortgage provider.
    • getmore4less
    • By getmore4less 10th May 19, 12:43 PM
    • 35,825 Posts
    • 21,931 Thanks
    getmore4less
    • #4
    • 10th May 19, 12:43 PM
    • #4
    • 10th May 19, 12:43 PM
    Without the sizes of the mortgage parts its just guesses on the potential saving/loss

    if 50% LTV you could also look at the Coventy 10y deals they become ERC free after 5 years
    • Wrath_of_Kain
    • By Wrath_of_Kain 11th May 19, 4:17 PM
    • 29 Posts
    • 3 Thanks
    Wrath_of_Kain
    • #5
    • 11th May 19, 4:17 PM
    • #5
    • 11th May 19, 4:17 PM
    Without the sizes of the mortgage parts its just guesses on the potential saving/loss

    if 50% LTV you could also look at the Coventy 10y deals they become ERC free after 5 years
    Originally posted by getmore4less
    What do you think then?

    XXXX
    XXXX
    Last edited by Wrath_of_Kain; 13-05-2019 at 6:49 PM.
    • Wrath_of_Kain
    • By Wrath_of_Kain 12th May 19, 5:33 PM
    • 29 Posts
    • 3 Thanks
    Wrath_of_Kain
    • #6
    • 12th May 19, 5:33 PM
    • #6
    • 12th May 19, 5:33 PM
    Any opinions/ advice ?
    • Thrugelmir
    • By Thrugelmir 12th May 19, 6:26 PM
    • 63,105 Posts
    • 56,023 Thanks
    Thrugelmir
    • #7
    • 12th May 19, 6:26 PM
    • #7
    • 12th May 19, 6:26 PM
    Interest rates are going to rise in the future. Irrespective of the outcome of Brexit.

    What options do you have with your current lender?
    "'The mistakes we make as investors is when the market's going up, we think it's going to go up forever. When the market goes down, we think it's going to go down forever. Neither of those things actually happen. Doesn't do anything forever. It's by the moment.'" - John Bogle
    • Wrath_of_Kain
    • By Wrath_of_Kain 12th May 19, 6:44 PM
    • 29 Posts
    • 3 Thanks
    Wrath_of_Kain
    • #8
    • 12th May 19, 6:44 PM
    • #8
    • 12th May 19, 6:44 PM
    Interest rates are going to rise in the future. Irrespective of the outcome of Brexit.

    What options do you have with your current lender?
    Originally posted by Thrugelmir
    I haven't spoke to them yet tbh ... do you see a problem changing providers ?

    I can contact them and see if they can match the same product ?
    • Thrugelmir
    • By Thrugelmir 12th May 19, 9:14 PM
    • 63,105 Posts
    • 56,023 Thanks
    Thrugelmir
    • #9
    • 12th May 19, 9:14 PM
    • #9
    • 12th May 19, 9:14 PM
    I don't foresee any particular issues in switching lenders. On the basis that you meet the lenders criteria.

    To make any meaningfull comparison always worth seeing what products are on offer from your current lender.
    "'The mistakes we make as investors is when the market's going up, we think it's going to go up forever. When the market goes down, we think it's going to go down forever. Neither of those things actually happen. Doesn't do anything forever. It's by the moment.'" - John Bogle
    • Wrath_of_Kain
    • By Wrath_of_Kain 12th May 19, 9:22 PM
    • 29 Posts
    • 3 Thanks
    Wrath_of_Kain
    I don't foresee any particular issues in switching lenders. On the basis that you meet the lenders criteria.

    To make any meaningfull comparison always worth seeing what products are on offer from your current lender.
    Originally posted by Thrugelmir
    I will contact the current provider this week.

    Is my thinking correct though i.e. no fees + fixing in at a low rate for pretty much the remaining life of the mortgage + free overpayments is MUCH better than my current predicament of BOE and SVR's ???

    I know that when you take out a mortgage you are mainly paying off the interest before the capital but does that have any bearing in a remortgage ?
    • Wrath_of_Kain
    • By Wrath_of_Kain 16th May 19, 4:51 PM
    • 29 Posts
    • 3 Thanks
    Wrath_of_Kain
    Got an appointment tomorrow ..... would appreciate some advice on here mind you ?
    • SouthLondonUser
    • By SouthLondonUser 16th May 19, 5:19 PM
    • 783 Posts
    • 388 Thanks
    SouthLondonUser
    What is the question, exactly?
    Also, what is the balance of the mortgage?


    You need to remember that the instalment for a repayment mortgage is made up of interest + capital; the real cost of a mortgage is not the monthly instalment; the real cost is interest + fees and other expenses. The principal that you repay is not a cost it is money you are repaying to yourself as it adds to your wealth.

    Of course you must be able to afford and be comfortable with whatever instalment amount you commit to; there is no point in saying that a 10-year mortgage will charge less interest than a 20-year one if you cannot afford the higher monthly instalment.

    But if you are comparing two mortgages and want to understand which will cost less, then you need to compare interest and fees.

    If you have access to a spreadsheet, the CUMIPMT formula will calculate the interest paid on a fixed-rate mortgage. For example
    =- =CUMIPMT(2%/12,120,100e3,1,60,0)
    will calculate the interest you pay in the first 5 years (months 1 to 60) if you borrow 100,000 for 10 years (120 periods) and the rate is 2% per annum (i.e. 2%/12 per month).
    Add fees, legal costs etc, and thats the cost of that mortgage over a certain timeframe.

    If instead the question is whether you should fix for 10 years, well, certainty has a cost. You need to look into what the early repayment fee would be, and be absolutely sure that you would never need to move for 10 years, or youd be forced to pay those fees. For me, 10 years is too long a period, Id never commit to that long, but everyone is different. You can often port, but porting is subject to status and criteria at the time of porting, i.e. you can have no guarantee that your porting will be approved. Not to mention it automatically rules out the option of selling, renting, then buying again.

    First Direct has a 5-year fix at 1.99%, and Santander has one around 1.90%. Are you absolutely sure a 5-year is too short for you? 10 years is a long time lots of unpredictable stuff could happen and throw off your plans.
    • dimbo61
    • By dimbo61 16th May 19, 5:42 PM
    • 10,252 Posts
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    dimbo61
    Advice !
    We need to know a little more information ?
    How much outstanding on the tracker rate ?
    How much outstanding on the SVR ?
    Term left ? Value of property ?
    Age, Income, current lender, What deals they have for existing customers !
    • dimbo61
    • By dimbo61 17th May 19, 10:56 PM
    • 10,252 Posts
    • 5,561 Thanks
    dimbo61
    The deal you are looking at gives you long term security.
    If you overpay a little each month you could be mortgage free by the end of the 10 year fix.
    Some people like to change lenders and find a Better deal every 2/3/5 years.
    Many others are not interested and simply want to clear that debt ASAP.
    Will you want to buy a bigger property in a few years time
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