Mortgage - Remortgage question
 

Our fixed term is coming to an end next year, so were starting to look

around to see whats on offer.

We keep being told by other people who have mortgages, that there are

some good deals out there (assuming you can get them :D) and big savings

to be made, due to the low interest rates.

However i cant see any big savings at all, only the same outgoing we

currently pay.

How are these people seeing these savings?

Is it that i,m not looking at it the right way, and calculating incorrectly.

Or are the people who think theyve made savings, actually made no

saving at all


Example

we want a remortgage of 85K

at 3% based on a 25 year term, its about £400 PCM

as opposed to the £600 odd we pay now

So a saving of £200, but the term is extended by 10 years, so were going

to be paying a shed load of interest again :(

But basing it on a 15 year term which is in theory when we want the

mortgage to finish, its £597, so no saving.

So which is correct?

or is there another factor that ive missed


Mart

What is your current fixed rate? Trackers/discounted rates will be cheaper, so at the minute you could get a discounted rate at 2.6% with no fees, or a tracker at 3.06 with no fees. If this is lower than your current fixed rate or your reversion rate, then you will save money by switching, keeping the borrowing and term the same. If you pay 1% less interest you will save £850 a year

What ever you do mate DO NOT use First Direct, we have just done a re-mortgage only for a small amount, less than a tenth of the value of the house, and if I had set a bunch of 7 year olds to sort it out they could not have made a bigger balls up of it. :mad::cuckoo::mad:

My tracker mortgage has just come to an end and Halifax has decided to knock the value of my house down by £25,000 to stop me getting any good offers at the moment.

I decided to risk variable at 3.5% as I can't really see it going up in the next year.

My mortgage has increased £300 a month

Jeez thats steep, were on 5.69% at the mo, so hopefully should see some

decrease


Mart

But surely if you keep the term the same, all your doing is taking the outstanding balance, and paying over another 25yrs, so you have had effectively a 35 year mortgage,

or have i missed something ? :D


mart

Try an Offset mortgage. Only really worth it though if you have a decent sum in the bank.
You have a choice of a shorter payment term, or lower monthly payments.

Can anyone explain why all the lenders have 3 interst rates foir the same mortgage?

Which one is the actual interest rate ?

eg

Initial rate 2.64%

Sub rate 4.24%

Apr 4.30%



So which is the "interest" rate that the repayments relate to

2.64% would be good, but once you hit 4.5%+ (which some do) then there

not so good

confusing or what


Mart

I can see why this isn't making sense to you. I should have said keep the end date of your mortgage the same (or keep the term the same as it is now, not what it was when you took the mortgage.) At the minute, your interest payments at 5.69% are near enough £400.00 per month. If you switch to a deal at 3.06% your interest payments will be around £220.00 per month. In order to repay the capital of 85k over 15 years, the capital repayments will be (roughly) the same regardless of interest rates, and your total payment wil consist of the combination of interest repayment and capital repayment. (Capital repayment is the amount you reduce the balance by each month.) So in your case you could save £180.00 per month during the time of the introductory offer (initial rate.) Then you revert to SVR and you won't save that much, but you can go for another introductory offer for a 13 year mortgage when your new deal ends. (called rate tarting.) Initial rate is the rate you pay at the start - after the end of your initial rate deal, you pay the sub rate (standard rate, SVR, full rate, subsequent rate) If you work out the fees involved, the total payments at initial rate and total payment at sub rate, this will give you the overall APR. With a sub rate of 4.24 and APR of 4.30, this deal must have a fairly hefty arrangement fee and survey fee. If the arrangement and survey add up to more than the saving during the initial rate, then you won't actually save anything. Then you need to compare actual saving during the initial deal with potential saving if you rate tart it for the duration of your mortgage. If won't always be possible to rate tart as paulg has discovered, but when he says it has gone up by 300 a month, it must have already come down by more than 300 a month in the past two years. See - dead simple.... (not........ as the rules stand now, my mortgage sourcing software can't work out the actual cheapest deal. Given that the company we get it from spent 160 million and 5 years developing it, there isn't much chance that you are going to work it out using google instead) PM me if you want a bit more direction on this

IsitjustmeordoesScoobynet delete spaces and new


paragraphs now on a random basis?

And breathe. :D