Today I took the bull by the horns and started the ball rolling on our re-mortgage. The current fixed rate deal that we have expires on 3rd June. When re mortgaging it pays to give yourself enough time to get everything in place for the switch.
Our current deal:
- Fixed rate mortgage at 4.94% which runs out on 3rd June and converts to the SVR (standard variable rate) of our mortgage lender.
- 10% annual limit on overpayments
- Interest calculated daily
- Monthly payment of £805
- No online access
We were looking for a new deal that gives us unlimited overpayment facilities, no or small arrangment fee, minimum tie in, daily interest calculations and if possible online access. Not too much.
There are literally hundreds of mortgages out there to choose from so we used a no fee broker, who searches the whole of the market, to do the looking for us. He came back with the following.
Potential New Deal:
- Flexible Tracker Mortgage 0.49% (fixed for 2 years) above Bank of England Base Rate (currently 5.25%) so a rate of 5.74%
- Unlimited overpayments
- Daily interest calculations
- No arrangment fee
- £300 cashback on completion
- No redemption fee after 12 months
- Online access
- Monthly payments of £885
I like the fact that we can overpay as much as possible, I like the fact that interest is calulated daily, so as soon as your money goes into the account the interest amounts are decreasing. I like the £300 cashback as this covers the legal fees for the re-mortgage which are going to be £293.75. I like the fact that we can escape the deal after 12 months if we want to, so no large redemption fee and I also like the fact that we can view the mortgage online.
Our payments will have gone up but we expected that as the interest rates have gone up since we first took on the fixed rate in 2006. If we stay with the same lender and don't move the mortgage we will have monthly payments of over £900 and still only be able to overpay 10% per year. This new deal, if we are approved, fits in with all our plans. It will also be available for six months so we can start on 3rd June when the current fixed rate deal expires.
When re mortgaging it's important to remember to make sure you do a whole of the market search and use a fee free broker. It's also important to give yourself enough time to get everything organised as it's not an easy process.
Your mortgage is also probably your biggest financial commitment so it pays to shop around for a good deal.
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2 comments:
I'm currently in the same boat as my fixed-interest mortgage ends this month.
The deal you've been quoted sounds very good indeed - I especially liked the "no arrangement fee" bit. I refuse to pay "arrangement fees" on principle - that's just me - I think they are a rip-off. :)
Useful info - thanks!
I also recently remortgage as well. We went from a variable rate to a fixed interest rate home loan.
I would love to have a rate of 5.74%. I just got a deal at 8.54%! Obviously, the economic condition in Australia is totally different to the UK.
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