Remortgaging - Advice needed

[Pipine]

Here's my question - I've read that its good to change deals (i.e. remortgage) once your tie in period deal is over and your rate increases. But this generally costs money PLUS as I understand it, on a repayment mortgage you spend the first few years of the 25 year term paying off mainly interest and not much capital.

 

So.. how can it be a good deal to keep swapping your mortgage every 2 or 3 years to get the best deal? Surely you're perpetually stuck in the interest heavy bit of your mortgage and never making much of a dint into the capital?

 

I've seen a deal which offers 5% for the term of the mortgage and some which track just above base rate... surely sticking with one of those kind of deals for the full 25 year term makes sense in the long run?

[Heyesey]

Here's my question - I've read that its good to change deals (i.e. remortgage) once your tie in period deal is over and your rate increases. But this generally costs money PLUS as I understand it, on a repayment mortgage you spend the first few years of the 25 year term paying off mainly interest and not much capital.

 

So.. how can it be a good deal to keep swapping your mortgage every 2 or 3 years to get the best deal? Surely you're perpetually stuck in the interest heavy bit of your mortgage and never making much of a dint into the capital?

 

I've seen a deal which offers 5% for the term of the mortgage and some which track just above base rate... surely sticking with one of those kind of deals for the full 25 year term makes sense in the long run?

 

 

It depends how much you save in the process; if you can cut your payments from £400 to £200 a month, then by paying £300 a month you'll still wipe out your debt a lot quicker than if you'd never moved.

 

If you can find a long-term 5% mortgage, there's not going to be a HUGE saving whatever deal you find.

[Guest]

I'm a mortgage advisor for the Halifax. basically, everytime you remortgage you have a mortgage repayment admin fee (halifax charge £175) which if you're only saving £10 a month, it doesn't really make sense to remortgage.

 

when you take out a mortgage you can take it over almost any term (provided it doesn't take you past retirement) and provided you can afford the repayments.

 

When someone remortgages they keep the same term they have remaining (ie if they've had a mortgage over 25 yrs and already been paying it for 2, then they remortgage over 23 yrs)

 

hope this helps

[*Turbo*]

I'm a mortgage advisor for the Halifax.

 

amateurs

 

 

 

 

[John]

I'm a mortgage advisor for the Halifax. basically, everytime you remortgage you have a mortgage repayment admin fee (halifax charge £175) which if you're only saving £10 a month, it doesn't really make sense to remortgage.

 

when you take out a mortgage you can take it over almost any term (provided it doesn't take you past retirement) and provided you can afford the repayments.

 

When someone remortgages they keep the same term they have remaining (ie if they've had a mortgage over 25 yrs and already been paying it for 2, then they remortgage over 23 yrs)

 

hope this helps

 

I don't quite understand this, surely £120 a year saving over 25 years is worth the £175 admin fee - is the admin fee per year? or one off?

[HotPhil]

The fee would be a one-off.

 

Our fixed-rate tie-in ended this year. We got an Independent Financial Advisor round for a chat and she went through all the various options/deals with all (not just the big high street) providers. In the end, turned out we were best off staying with our current lender.

 

It's not always better to be a "rate tart" and chase the low numbers. Differences in terms, interest calculations, fees etc can quickly negate any "headline" saving.

 

Speak to an IFA.

[joeyannie]

I have an independant advisor who finds me mortgages with no fees attached when I remortgage (just completed my second swap) and by getting a vastly reduced rate but still overpaying (new payment should be £400, currently paying £550) I clear the debt much more quickly and am unlikely to ever not be able to afford the repayments even if the bank of england put up the interest rates.

If you get the right advice (best from someone independant- not affiliated to a bank or an estate agent as they are never truely unbiased) you can make great savings...my mortgage term is now only 18 years, I took out a 25 year mortgage 4 years ago so am already making significant inroads into the capital repayments.

[Nomis]

I have a £69500 mortgage over 17 yrs at 5.49% interest, paying approximately £527 a month.

 

This month I will be switching over to a lower rate mortgage, with no fees attached and will intend to 'overpay' by around £70 a month so that my mortgage will be paid in 14 years time. This way, you end up paying a lot less in interest on the total amount of the loan.

[Pipine]

I plan to get a flexible deal where I can overpay, even tho I dont have much spare cash at the moment (still doing up the house!) I hope I will one day!

 

So is it best to look at the total interest (over the full term) figure when choosing mortgages?

[Nomis]

So is it best to look at the total interest (over the full term) figure when choosing mortgages?

 

Its something I always do