Which remortgage deal of these offered?

[JustRollWithIt]

My 5 year fixed rate is coming to an end with Halifax. Paying £1400 per month. 20 years left. There are currently 4 sub-accounts which make up the £1400 total all fixed until 2025 and summarised here:
£188,174 at 1.54%
£30,320 at 1.54%
£18,929 at 5.96%
£27,267 at 5.96

I don't have funds to allow early payment of any of this at the moment. Child starting Uni this year etc. I was afraid that with the low 1.54% rate my monthly payments would rocket, but the Halifax app is saying I can switch deal now to either of the following:

2 year fixed 4.93% at £1373 per month
5 year fixed 4.41% at £1361 per month
10 year fixed 5.19% at £1380 per month

Why are the monthly payments lower? I thought they would go up considering the low 1.54% rate I currently have on the majority of the mortgage. Which deal would you go with, or should I shop around?

Thank you

Are all your mortgages coming to the end of their fixed rates at the same time?

The 2 with the 5.96% rate come to an end at the end of January. The other 2 with the low rate end in September (all 2025).

is it definitely to change the rate of all 4 accounts? My app lists the amount each sub account would be?

They will likely only be for one of the loans.
I had the same was really pleasantly surprised until I received an offer for the additional borrowing amount and realised they are seen as separate accounts (but merged together and only 1 payment taken in total)

Will it not just be switching the deal of the two due to expire? Which would result in a saving for a few months as they are currently a high rate. In a few months you'll then have to pick a deal for the other two sub accounts, when your overall payment will likely increase over £1400 again?

A good indicator of how banks are predicting interest rates rates is by looking at their fixed term savings product. These currently are higher for short term than instant or long term. This indicates that rates will not rise significantly over the next 6 - 8 years.
I was previously a mortgage underwriter and I would definitely go for the 5 year deal.

I would probably go for the 5 year. 10 years is much too long, 2 years is a bit short. I do prefer a 3 year but currently on a 5 year myself which in hindsight I'm pleased about.

The OP is concerned why the payments are cheaper not really which one she should choose. We think it may be because it isn’t all 4 sub accounts. Anyone have any knowledge of Halifax mortgages?

You can work it all out if you plug it in to a mortgage calculator.

The first two due to expire are currently costing £330 a month. If you remortgage to the 4.93% rate, it’ll cost £303, so £30 a month less than you’re paying now. Add that to your current payment for the other two accounts, which is £1060ish a month and your overall payment has slightly decreased.

When you are a few months out from September you can remortgage the other two accounts. It won't allow you to do that now as you're too far out.

Currently you’re paying £1058 a month on these two accounts at 1.54%.

When you remortgage (some time between March and Sept depending on when Halifax allow, I can’t remember if we are three or six months in advance for a new deal) your new payment for the previous 1.54% accounts will be £1433 at the 4.93% rate.

So from then it will be around £1736 a month at the 4.93% rate. You can adjust the rate to see the difference it makes.

Numbers might vary slightly but generally that’s what will happen.

This happened to me and TSB explained it to me as simply as they could - they said it's cos the starting balance is less than it was when I previously remortgaged.

Thanks for all to all your replies so far. On the app it says " the costs include all sub-accounts you have on your mortgage account and assume you're switching all eligible sub accounts to the new deal (your current deal £1400 monthly payment). Here are the rates of your current deal that you can switch today... then it lists all 4 sub accounts.
If the monthly payments are actually going to be less I am very pleasantly surprised as my current low interest rates ending in 2025 has been worrying me.
Based on all of this would you click to switch to one of these Halifax deals?

The devil is in the ‘eligible’ detail. Two of your sub accounts are not eligible to be switched as they don’t end till September, which is outside of the time Halifax allow to switch to a new deal without penalty. Your eligible sub-accounts are the two due to expire in January,

It’s saying that when you switch the eligible accounts (the two Jan expiration deals), your payment across all sub accounts will be X.

In September, you’ll get the same prompt again and this time it will increase your overall payment as you’ll be switching the cheap interest deals to a more expensive rate.

Before signing up to anything, I would contact them and ask them to explain it. There’s no way your payment can reduce overall past September when the bulk of your mortgage is currently on a 1.54% deal and you’re switching to 4+%. The maths does not math.

This is only based on the two sub accounts which end in Jan. The reason it's gone down is due to the interest rates on these two accounts already being high
The payment will then go up again a lot when the other two accounts are at expiry as these are on the very low rates and make up the bulk of the monies owed

You could consider switching to a tracker (with no early repayment charge) for the first 2 due to end. Then when the other 2 end you are free to look beyond your current lender to get the best deal for all parts of your mortgage together.

If you remortgage the first tranche with your current lender then you are stuck with them for the September ones as well.

Just be careful of admin fees which they sometimes sneak in

Thank you all. I will contact them for some clarity, understanding now that the payments may increase when we reach September. Do you think any of these deals offered are decent and worth committing to at this point?

What is your LTV %?

Around 55%

Looks like rates of closer to 4.1% are available. I'd be tempted to move to a tracker and then align all tranches to the same date and remortgage in full by looking at the whole market for the best deal.

Thank you. There is also the option in the app to switch to a 2 year tracker at 5.21%. It doesn't mention if I would be able to walk away from the tracker though before September

Having spent a bit of time looking at calculators, this all seems to be exactly right, thank you very much for explaining. I wonder if I switch to one of the Halifax retention offers now, then the 2 sub accounts ending in September will also automatically be locked in to that too come September with ERCs applying automatically. I am now wondering if I should just let the first 2 sub accounts move into the variable rate (currently 8.24%) which will increase monthly payment by around £63 per month, then come May (4 months prior to the other 2 sub accounts fixed deals ending) I can see what is on offer at that point. OR is the 5 year fixed 4.41% rate they are offering now a good deal worth committing to? I guess no one knows what will happen with the rate, but what would you do? With this 4.41% rate across all 4 sub accounts, my monthly payments come September will be around £275 more than they are right now (ouch) but at least I'd know what I'm heading for! OR do I do nothing, and take a chance on how things will be come May?

Did they automatically switch your additional borrowing account to the deal you had chosen at the point it came to its end of fixed term, or did you have to choose a separate deal for that account? If the latter, I guess you were kind of tied to the provider as you had the other account re-committed with them?

Hi OP, I would strongly recommend speaking with an independent mortgage broker. You can almost certainly get a better deal than sticking with Halifax.

No we got a letter a few months later telling us our deal was ending and to select a new deal, at that time the deals were still the same so we selected the same offer (3 yr fix) as yes we were locked in to the current provider. We thought our new payments were only going to be £100 a month but we ended up paying almost £450 more a month.
Our plan now is at the end of the deal to let the first smaller loan move to the standard variable for 3 months then move the whole lot to a new provider.