Im not sure i have my figures calculated right, I think I do but am just looking for validation.
Im with Lloyds, my partner is with Natwest.
Last year (Feb 2025) we took out a loan with Natwest of £25,000.00 over the term of 8 years, 7.5% and payments £345 per month. The original thinking behind the long term was to give us breathing room at the time, and increase payments later on. Payments began in either march or april 2025.
At the time, I was searching on Lloyds but the best interest rate and the best they would offer me was in the 15% region.
I've logged on to Lloyds today to look at whether I could get a better rate. The outstanding balance of the loan is now £22,400 but when I've got the full calculation for redemption it would be £22,800.00.
Lloyds are offering me a loan of £22,800 over 7 years, for 6.3% which is £336.00 a month. I'm already eligible, I've been "pre accepted" on their soft search.
We are not intending to keep it for the full 7 years and do intend to overpay like mad to get it gone in 2 and years by Summer 2028.
When plugging the figures into a calculator online, it reckons on the 7.5% loan over the term of 7 years I would be paying £6,575.00 interest total whereas on the 6.3% loan over the same term I would be paying £5,454.00 total.
Is that really right, that a difference of 1% would mean an extra £1000 paid in interest? If that is the case it is a no brainer to switch to the Lloyds one!
DH and I tend to get Loans with whosever bank is more favourable at the time and we split bills between us accordingly. We have been together for 20 + years and I understand the risks of us getting bank loans in our individual names.