Which mortgage deal?

[mnahmnah]

Hi

My current mortgage deal (5.6%, £1323 per month) expires in September. Their current offers for me are attached. Can anyone who knows their stuff advise which would be the best option? I would like to opt for 5 years, but might interest rates go down in 2 years? Also, i don’t have to decide right now, should I wait a month to see if the offers improve?

Thank you!

But then add on the fee which makes the fee deal very very slightly more expensive over the five years. It’s almost identical though so it’s about whether you want a lump fee now or slightly higher payments over 5 years.

I would rather live with the 5 years and rates dropping. For security and ease of mind - see my last post!

But I am going to see if I get a better deal after the predicted interest rate drops on August 7th and my next two payments hopefully take us to 80% LTV. DM has offered to pay any more we may need for this in order to get a better deal, but hopefully we won’t need her to.

I’m surprised that 5 years is the most expensive. Just had my offers through and 5 years was the cheapest. I also got a 3 year offer which is the one I will probably take.

Neither. You should go through a mortgage broker and see what they advise. Look at moneysavingexpert on remortgaging, too.

See PP of mine - don’t want to do this

Do you mean this comment?
"I can’t bear the idea of applying for a new mortgage again though!"

I don't really understand why you "can't bear" it, yes it's a faff but surely worth it if you can save yourself hundreds or even thousands of pounds. Anyway, your choice obviously.

(FWIW DH and I have just had a mortgage application approved, it was pretty painless and we got a much better rate than both rates your lender has proposed.)

It depends on personal circumstances.

Last time we renewed our deal (9 years ago - 10 year fixed!) my DH had been out of work for a while and I'd just changed jobs. Going through other lenders' affordability checks was going to be painful so we stuck to the same lender and took the long fixed rate period so we didn't have to go through the renewal process again in a hurry.

With the way interest rates have increased, it looks like we made a good decision!

@mnahmnah (I now have that tune stuck in my head!) - it is difficult to predict interest rates. Personally I can't see them increasing in the next 2-5 years, but anything can happen (aka Covid!). I agree with PP's point about there being two sets of fees if you take the 2 year deal, so on balance I'd take the 5.

Then, given you're already paying more than the renewal rate, top up the payments so that you're still paying the same. You'll then clear a straight £9k+ off the mortgage on top of your regular payments, by the time the 5 years is up.

Well it wasn’t painless for us. I’m not a pathetic person just incapable of doing a mortgage application. I have bought 4 houses. But I am not willing to submit every financial document and have them scrutinised and questioned again, including getting letters from my employer about my earnings etc. It was very stressful.

Thanks. Very helpful and understanding that applying for a mortgage can be stressful! We already overpay when we can, so yes we would continue doing that. I’m definitely thinking 5 years.

re brokers - we used one recently who did all the paperwork for us, they made the process very easy. And it was free for us. Not wanting to press you on using a broker if you really don’t want to (for whatever reason) - however I never wanted to use one previously as I thought they would cost me and didn’t see the point. I wouldn’t hesitate again now (eg. no more hours of calls with mortgage companies, they extended our deal when it ran out with no effort from us - was very handy)

Yes we used a broker. Sent payslips and bank statements and they did the rest 🤷‍♀️

I would suggest going to see a broker, they will review the whole market and see if anything better is available. Go through your objectives and plans and guide you on the best way forward to meet your needs. Will also look and review your insurances to make sure you are not left in a vulnerable position. Better to take a morning and sort it out properly rather than rush and second guess it's the wrong decision.

whole market does not include every lender, for example, direct line deals are not available through brokers. There are brokers who don’t charge a fee.