Author Topic: Mortgage renewal? Which?  (Read 3106 times)

Mortgage renewal? Which?
« on: 29 April, 2008, 12:35:29 pm »
Any wise advise on what deal to look for in the next few months?

We're after a transition deal, something we could carry away to get to a bigger house within the next 2-3 years possibly. We were looking at moving earlier in the year but the housing market (and the mortgage) one have led us to stay put for a short while to see what is happening. Nice houses to buy, but it is difficult to sell and to get good deals.

So variable rates for the next two years?
Frenchie - Train à Grande Vitesse

microphonie

  • Tyke 2
Re: Mortgage renewal? Which?
« Reply #1 on: 29 April, 2008, 03:15:42 pm »
I've always used L&C for mortgage advice and have always been pleased with the outcome. Check out their best buy tables/calculators etc.

I'm lucky enough to have an offset at 0.50 above base rate for the life of the mortgage (about 7 years left) which seems a pretty good deal judging how things have gone recently.

No specific advice from me as I'm not a financial advisor!
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pdm

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Re: Mortgage renewal? Which?
« Reply #2 on: 29 April, 2008, 03:42:47 pm »
The best thing we did was go for an offset mortgage, especially if you are a higher rate tax payer, have no other debts and have savings.
We always had to run a decent level of savings for fees, tax, etc. That offset made the mortgage much cheaper. This saving makes it is likely that the loan will be paid off completely about 7 years early.

Re: Mortgage renewal? Which?
« Reply #3 on: 29 April, 2008, 03:53:18 pm »
Tracker is what I meant sorry. I could look at offset as well, something I had not considered.
Frenchie - Train à Grande Vitesse

border-rider

Re: Mortgage renewal? Which?
« Reply #4 on: 29 April, 2008, 04:02:52 pm »
I dunno about offsets

If you use all your savings to pay lumps of the mortgage (which is effectively what an offset does) you'd pay it off sooner anyway.  You'd have to check the mortgage rate for the offset vs what you could get eg for a tracker.  If it's much different you might be better off not having an offset.

Re: Mortgage renewal? Which?
« Reply #5 on: 29 April, 2008, 04:21:02 pm »
I dunno about offsets

If you use all your savings to pay lumps of the mortgage (which is effectively what an offset does) you'd pay it off sooner anyway.

True but offsets have a couple of benefits over paying back chunks of a non-offset mortgage:

1) You don't have to pay any fees (most mortgages will charge you for paying back more than a certain percentage early).
2) You can get money back out of it, instantly, without having to remortgage.

The money we'll need to pay for our bathroom is part of the dosh sitting in our offset account. Until we need to write the cheque to the builder it's helping us repay our mortgage a little bit sooner.
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rogerzilla

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Re: Mortgage renewal? Which?
« Reply #6 on: 29 April, 2008, 06:43:32 pm »
How big is your mortgage?  The smaller it is, the less you'll want to pay any "arrangement fee".  These are just front-loaded interest really, and fees of £1000 are only justifiable for a massive mortgage - otherwise you're better off getting a slightly higher rate and no fee.  It's an easy enough calculation to find the break-even size of loan for any fee and interest rate comparison over the term of the deal.

Nationwide no longer offers its best variable rate deal through intermediaries, but only to direct customers - something to be aware of.  Most lenders are actively trying to scale down new mortgage business at the moment due to the cost of funding.
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border-rider

Re: Mortgage renewal? Which?
« Reply #7 on: 29 April, 2008, 06:47:05 pm »

1) You don't have to pay any fees (most mortgages will charge you for paying back more than a certain percentage early).

Our last one didn't, which is why we chose it.

So it's a balance of convenience about withdrawing money vs the rate you're on.

Re: Mortgage renewal? Which?
« Reply #8 on: 29 April, 2008, 11:32:30 pm »
How big is your mortgage? 

ca. £110k

Quote
Nationwide no longer offers its best variable rate deal through intermediaries, but only to direct customers - something to be aware of.  Most lenders are actively trying to scale down new mortgage business at the moment due to the cost of funding.

Cheers! I may contact them again directly then. Bad timing I know!
Frenchie - Train à Grande Vitesse