# Re-mortgage time - thoughts appreciated



## t1mmy (Dec 9, 2006)

Hi,

We are coming to the end of our 5 year fixed mortgage and are looking at our first re-mortgage.

We are currently paying £849 p/m and will have a 24 year term left. We are also looking at adding to the mortgage for our upcoming house extension.

I've got a couple of options below and I would appreciate peoples thoughts. The options are by no means exhaustive; however, they do cover off both fixed and tracker scenarios:

Option 1
Stay with the current bank (Santander) on a 5 year fixed at 3.19%. Monthly payment of £813.21 and an arrangement fee of £999. This would allow us to overpay £2,147.40 over the 5 year term based on our usual £849 payment.

Option 2
Move to HSBC on a lifetime tracker at 1.99%. Monthly payment of £715 and an arrangement fee of £999. This would allow us to overpay £8,040 over a 5 year term based on our usual £849 payment, subject to the base rate not changing.

With option 2 I know that the base rate will increase and probably sooner rather than later.

So here lies the issue. Do I go with the fixed as it plays on people's fears that rates will go up, or risk the tracker for potential gain? I know no one has the answer because if we did everyone would make the correct choice.

What I am keen to know is peoples thoughts on what they would do? Do you think when the rates rise it will be by 0.5%? Do you think we will see rapid a sharp rise?

We aren't that far off hitting the triggers the BOE set out for a rise!

All thoughts and opinions are appreciated.


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## J306TD (May 19, 2008)

I have our mortgage on a fixed rate. I prefer to know if prices do go up it wont affect me. Although the interest rate is normally slightly higher for the privilege.


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## Alzak (Aug 31, 2010)

Only sensible option now is to take fixed rate on, looking on BOE rates this will increase as early as first half of next year.

Question is would you be able to afford higher payment when rates go up ? if not, take a safe route and fix your payments for another 5 years at least you can plan your spending for this time without being hit with higher mortgage payments.


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## Bill58 (Jul 5, 2010)

We've always gone for fixed rate over 5 years and this has worked out well for us. Only one has the fixed rate worked out slightly more, current fixed rate we're on is 4.40% and variable rate is 3.99%.


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## Andyg_TSi (Sep 6, 2013)

How much equity do you have in your property?

You can get 1.99% fixed on some mortgages depending on your Loan to value (LTV) equity situation.

Im in the same boat, currently on my lenders standard variable rate at 2.5%

I currently owe 95K however im going to be in a situation to pay off 30k of my mortgage come September

Will be looking to remortgage and try and get a low as possible fixed rate I may only need to borrow 50% of my house value.


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## t1mmy (Dec 9, 2006)

Andyg_TSi - The house is worth approximately £260,000 and with the money were are looking to add on for the extension we will owe about £163,500 (62.8% LTV)


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## Andyg_TSi (Sep 6, 2013)

T1mmy,

Id book an appointment with an independent financial advisor mate, who can look at all available deals across the market for your circumstances. 

My honest opinion is that with nearly 40% equity in your property you should be able to get a very attractive fixed rate, certainly better than you have been offered.

Trackers are alright, but the key there is how much above the BOE base rate it track's at....0.25%, 0.50% above...

The attractive option is to fix, but only if you can fix at below the lenders current standard variable rate.


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## pinch (Oct 30, 2011)

Yep, ring an IFA, especially as your considering adding to it which will change LTV. 24 year term suggests you are relatively young and still working age in 24 years time. If you are employed, and comfortably so, with fixed income like me, then I like fixed outgoings. I only went tracker once, and interest rates changed for 4 or 5 consecutive months, making the payments change by nearly £100.
Rates are rock bottom at the moment, they will either stay the same, or go up, which is why I went for a 5 year fix. (10 years left! Mortgage free aged 48 sounds good doesn't it?)

Only you can choose what's right for you, but do get some independent advice. And with the extension works, don't get carried away! You can go daft on fittings sometimes, keep yourself balanced and in check.


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## wrxsti (Feb 3, 2013)

I'm sure Bank of England base rate will be going up in the near future, it needs to as house prices are rising to fast. It may cost a little extra per month put for peace of mind I'd go fixed.


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## robertdon777 (Nov 3, 2005)

Depending on your LTV you can get better rates than that fixed one you mentioned.

Remember when you remortgage the bank will arrange a valuation of your property a lot of times. They tend to value them lower than you would, this suits them as they can increase the LTV value thus allowing them to bump the interest rate up that they offer you.

I had a big fall out with The Nottingham over this. I was within 4k of my original valuation, the valuer (qualified my ****) was over 15k out (an identical house sold just after I applied and the argument had already been done and dusted).

The Nottingham still refused to accept my valuation was closer, stating that I have no qualifications and the survey did!


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## bigslippy (Sep 19, 2010)

Nationwide 5 year fixed at 3.09% up to 75% loan to value( so there's room for any difference in value) , £99 booking fee , £900 arrangement fee , free legals and survey.... things I do on my day off


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## bmerritt87 (Mar 24, 2013)

Yorkshire Building Society 5yrs Fixed 2.99% 65% ltv £845 arrangement fee. Face to face or phone and will be processed in branch and approved by a Branch manager rather than a processing centre miles away. For 2 year fixed can get 1.66% on same terms.


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## bigslippy (Sep 19, 2010)

bmerritt87 said:


> Yorkshire Building Society 5yrs Fixed 2.99% 65% ltv £845 arrangement fee. Face to face or phone and will be processed in branch and approved by a Branch manager rather than a processing centre miles away. For 2 year fixed can get 1.66% on same terms.


Tis a good deal,however no free legals or survey and there is also a £130 booking fee upfront.


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## J306TD (May 19, 2008)

Try speaking to a financial advisor. They can get you rates that aren't normally available


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## t1mmy (Dec 9, 2006)

I've been sat here this morning doing a few comparisons, some people who have contributed to the thread may be interested.

All options are for 5 year fixed mortgages based on a 65% LTV:

Option 1: Santander (current lender)
70% LTV
3.19%
£813.21 x 60 = £48,792.60
Product cost & fees = £999.00
Valuation = Free
Total cost = £49,791.60

Option 2: Chelsea Building Society
65% LTV
2.94%
£792.02 x 60 = £47,521.20
Product cost & fees = £1,675.00
Valuation = £270.00
Total cost = £49,466.20
£325.40 saving

Option 3: Post Office
75% LTV
2.98%
£795.39 x 60 = £47,723.40
Product cost & fees = £1,495.00
Valuation = £360.00
Total cost = £49,578.40
£213.20 saving

Option 4: Yorkshire Building Society
65% LTV
2.99%
£796.23 x 60 = £47,773.80
Product cost & fees = £975.00
Valuation = £270.00
Total cost = £49,018.80
£772.80 saving

Option 5: Nationwide
70% LTV
3.09%
£804.70 x 60 = £48,282.00
Product cost & fees = £999.00
Valuation = Free
Total cost = £49,281.00
£510.60 saving


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## bigslippy (Sep 19, 2010)

Is your valuation fees based on what you are borrowing or the value of your property?

There will be legal fees unless stated on the deals that there are free legals:thumb:


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## t1mmy (Dec 9, 2006)

From memory I think they were based on the amount of borrowing. I'll go check on the legal fees.


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## t1mmy (Dec 9, 2006)

I've just had a quick look on moneysupermarket as I was using it for a quick comparison and it makes no mention of legal fees.

From you experience can they vary a lot between lenders? What kind of figure are you usually looking at, or is it not that easy?


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## bigslippy (Sep 19, 2010)

t1mmy said:


> From memory I think they were based on the amount of borrowing. I'll go check on the legal fees.


Valuation price is dictated by VALUE not borrowing , Yorkshire valuation is over £500 if I recollect :thumb:


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## bigslippy (Sep 19, 2010)

t1mmy said:


> I've just had a quick look on moneysupermarket as I was using it for a quick comparison and it makes no mention of legal fees.
> 
> From you experience can they vary a lot between lenders? What kind of figure are you usually looking at, or is it not that easy?


Im a self employed mortgage broker bud:thumb:

Just taking wife to work , will be back in 30 mins or so , or you can pm me... not after your business , just giving you information / guidance:thumb:


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## t1mmy (Dec 9, 2006)

I'm pleased to accept all help and guidance!


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## robertdon777 (Nov 3, 2005)

Try to put down your estimated LTV and who do you bank with?

Sometimes you can save a 1/4 of a percent with loyalty schemes or save on the arrangement fee.

Remember Google offer a mortgage comparsion tool with some of the latest offers. Watch though as the people selling them (if you go through Google) are on commission.


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## bmerritt87 (Mar 24, 2013)

t1mmy said:


> I'm pleased to accept all help and guidance!


Yorkshire Building Society don't use brokers so have to go direct. They have accord as their intermediary for introduced business. YBS also own Chelsea Building Society. The valuation fee you quoted sounds about right for £260k value, can't remember the exact figure as it's tiered on value as mentioned but it's not £500 for a standard valuation at that purchase price. With regards to legals personally i recommend getting your own local solicitor as usually the free legals require you to use the company's own which in many cases requires dealings through a call centre and post, not the easiest way to obtain a mortgage. Happy for you to PM if you want any more info.


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## rob_vrs (Jan 4, 2012)

bmerritt87 said:


> Yorkshire Building Society don't use brokers so have to go direct. They have accord as their intermediary for introduced business. YBS also own Chelsea Building Society. The valuation fee you quoted sounds about right for £260k value, can't remember the exact figure as it's tiered on value as mentioned but it's not £500 for a standard valuation at that purchase price. With regards to legals personally i recommend getting your own local solicitor as usually the free legals require you to use the company's own which in many cases requires dealings through a call centre and post, not the easiest way to obtain a mortgage. Happy for you to PM if you want any more info.


Just took my first mortgage ben, forgot your a bank man


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## bmerritt87 (Mar 24, 2013)

rob_vrs said:


> Just took my first mortgage ben, forgot your a bank man


 shame cause some good deals kicking about at moment! But knowing you I'm sure you did your research and got a good deal :thumb:


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## bigslippy (Sep 19, 2010)

Who do you work for Ben?


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## rob_vrs (Jan 4, 2012)

bmerritt87 said:


> shame cause some good deals kicking about at moment! But knowing you I'm sure you did your research and got a good deal :thumb:


Im quite happy with it at 2.89%. Very new to me all this but think iv got it all in order.


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## bmerritt87 (Mar 24, 2013)

rob_vrs said:


> Im quite happy with it at 2.89%. Very new to me all this but think iv got it all in order.


Yes that is a good rate. I'm presuming you had a decent deposit to get that rate. We have a good FTB range and 95% ltv but I'm guessing at that rate you have but 20-25% down or gone for a 2 year fixed?


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## rob_vrs (Jan 4, 2012)

85% LTV, fixed for 2 years yes


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## bmerritt87 (Mar 24, 2013)

rob_vrs said:


> 85% LTV, fixed for 2 years yes


Well congrats mate, best thing you can do buying a house! No more buying Crystal Rock though. Wait till all bills start coming ha ha.


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## rob_vrs (Jan 4, 2012)

bmerritt87 said:


> Well congrats mate, best thing you can do buying a house! No more buying Crystal Rock though. Wait till all bills start coming ha ha.


Haha, all bills are budgeted, and yes its a lot of money running a house but a hell of a lot less than I expected  cheers mate .


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## bigslippy (Sep 19, 2010)

rob_vrs said:


> Haha, all bills are budgeted, and yes its a lot of money running a house but a hell of a lot less than I expected  cheers mate .


As long as you bought a house with a mancave Rob


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## t1mmy (Dec 9, 2006)

t1mmy said:


> I've been sat here this morning doing a few comparisons, some people who have contributed to the thread may be interested.
> 
> All options are for 5 year fixed mortgages based on a 65% LTV:
> 
> ...


Firstly, a massive thanks to all those who have aired their thoughts in this thread, it's been educational and not just for me I'm sure.

I've been delving into this further and the general consensus is that legal fees will be approximately £360 inc. VAT. This wipes out options 2 & 3 as they would ultimately cost more.

Option 4 is a bit touch and go with the 65% LTV, I suppose it would all come down to the opinion of the valuer. Once you've paid out for this to be done it's a bit of a risk that they may not value it high enough for what is needed. Having said that near similar houses have sold in the cul-de-sac round the corner for £260,000+ within the last 2 weeks.

Option 5 looks to offer the most savings, but at £100 a year I'm not sure. One to think on some more.

For those of you who have shifted lenders before, was it much of a hassle? I don't remember it being too difficult in the first instance but we've never re-mortgaged before.


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## PaulN (Jan 17, 2008)

This is handy as im in the same position, my 2 year fixed rate of 3.39% has lapsed and im on 3.99% im firstly going to speak to my bank and give them a chance to give me a really good deal or ill be moving.

Id prefer to keep my business with them but not affraid to move.


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## pinch (Oct 30, 2011)

T1mmy. This is swap number 7 or 8 for me. The only real hassle has been the length of time. Bought in March originally. After several remortgages I'd got back to a march transfer, effectively adding a year to the whole term, so I shaved it off with a remortgage, 12 years not 13 last time. Legal fees, valuation, and fee can normally be added to the loan(but cost you more, especially considering your length of term). Some remortgages have meant I paid standard variable rate for one or two months before getting the new deal, meaning extra paid out. However, if you are remortgaging and extending the loan (for extensions) that cash injection should cover it.

My recent remortgage was with the same lender, so totally hassle free, as well as being the best deal according to my IFA.

Please do get independent advice, mortgage brokers generally work on commission from the deal, flat fee from the lender and not too much difference between them. They'll also (if they're good) offer advice on life insurance/critical illness benefit, as well as wills. Not a cheerful conversation, however very necessary, especially if you have dependents.


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## Clean ocd (Mar 29, 2014)

I use to deal with mortgages have you looked at offset at all , that's if u have any overdrafts or savings ? Also if all ur banking is with ur lender u can say I bank everything with you and can waver fees  something can haggle about and keep in ur back pocket they will do especially if a mortgage that's if all ur banking is with them


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## Gixxer6 (Apr 5, 2014)

When I was looking to remortgage I found the site below very helpful. It helped with calculating the true cost of the mortgage including fees.Some providers will offer a lower interest rate but the arrangement fees are higher than a deal with higher arrangement fees and lower interest rate:

http://www.thisismoney.co.uk/money/...-calculator-Compare-true-cost-rates-fees.html

http://www.mortgages-online.co.uk/Mortgage_Calculators/true_cost_mortgage_calculator.aspx

t1mmy, to answer your question: I've moved lenders. Switching was fairly straightforward, had to go through the usual proof of expenses/income, sign some papers, pay for release of deeds etc.. 
I arranged the new mortgage through London and Country and paid no fees, L&C were pretty good, I'd definitely use them again: http://www.lcplc.co.uk/


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