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Pulse
Original Poster
8,653 posts
87 months
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I'm hoping someone can help advise, or just sense check what I'm thinking...
We bought our house almost 5 years ago for £143,000, and fixed for 5 years. We're now coming to the end of this fixed rate, so need a new mortgage.
I'd estimate the house is worth about £130,000 now, but we should only have about £55,000 owing when October rolls around and we can put our savings in.
With a relatively small mortgage, would we likely be better sticking on the SVR? This then allows us to overpay as much as we like (which would be c.£1000 a month I'd say), with the flexibility to move house should we see something we like.
Additionally, whilst I see rates of 2.5% (or thereabouts) for a nice fixed rate for 2 years, this often comes with a £2000 arrangement fee, etc... If we roll onto the SVR, I guess we have no fees at all?
Can anyone help advise?
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Sarnie
1,869 posts
78 months
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Pulse said: I'm hoping someone can help advise, or just sense check what I'm thinking...
We bought our house almost 5 years ago for £143,000, and fixed for 5 years. We're now coming to the end of this fixed rate, so need a new mortgage.
I'd estimate the house is worth about £130,000 now, but we should only have about £55,000 owing when October rolls around and we can put our savings in.
With a relatively small mortgage, would we likely be better sticking on the SVR? This then allows us to overpay as much as we like (which would be c.£1000 a month I'd say), with the flexibility to move house should we see something we like.
Additionally, whilst I see rates of 2.5% (or thereabouts) for a nice fixed rate for 2 years, this often comes with a £2000 arrangement fee, etc... If we roll onto the SVR, I guess we have no fees at all?
Can anyone help advise? You won't have to pay any fee's for moving onto the SVR. Do you know what rate the SVR will be (check your offer documents or phone your lender as it may have changed)? If you signed up five years ago, you might be in for a very nice suprise now!
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Pulse
Original Poster
8,653 posts
87 months
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It's currently 3.99%, which is fine by us. Since it's only £55,000(ish) that'll be left owing, it's not a big risk even if it were to go up a few %.
We're on 5.99% at the moment, paying £850 a month. This would take us to about £350 a month at 3.99%, so we'd have scope to go higher if we wanted to. Naturally, that's where our overpayments would come from - we may as well keep ploughing it in.
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eastsider
627 posts
92 months
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You can do better than that, given your loan to value ratio is very low. I’m with First Direct, their lowest rates require LTV of 65% or less which you are well below. You can get a lifetime tracker at 3.29% (2.79% above base currently 0.5%) which would make your payments on £55k over 25 years £269 month. Overpay, or shorten the term.
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Pulse
Original Poster
8,653 posts
87 months
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eastsider said: You can do better than that, given your loan to value ratio is very low. I’m with First Direct, their lowest rates require LTV of 65% or less which you are well below. You can get a lifetime tracker at 3.29% (2.79% above base currently 0.5%) which would make your payments on £55k over 25 years £269 month. Overpay, or shorten the term. Sounds good, but aren't you locked into a tracker?
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Sarnie
1,869 posts
78 months
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Pulse said: Sounds good, but aren't you locked into a tracker? No. There is a £499 fee to it and you'll have to find (and pay) a solicitor if FD don't supply you with one.
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Pulse
Original Poster
8,653 posts
87 months
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Ah, I had forgotten about solicitors fees as well. Well in that case, we're almost certainly better off sticking with the SVR.
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eastsider
627 posts
92 months
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Pulse said: Ah, I had forgotten about solicitors fees as well. Well in that case, we're almost certainly better off sticking with the SVR. FD might pay solicitor costs not sure, worth a call. No cost to me but I'm remortgaging with them. If the £499 fee puts you off there is one at 20 basis points higher 'fee free'. For my outstanding of several hundred £k it makes sense to pay the £499 but perhaps the other way round for your lower amount.
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Pulse
Original Poster
8,653 posts
87 months
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I'll clearly need to take a proper look into this, or perhaps even discuss with our current lender (Halifax).
I think we could clear the £55,000 within maybe 3 years if we really pushed it, but there's little point if we're just going to move anyway!
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Pulse
Original Poster
8,653 posts
87 months
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Just to update this thread a bit, we're now on schedule to owe around £50,000 on our £130,000(ish) value house.
Our plan is to stick on the SVR, which we revert to on the 1st of October. I'm not entirely sure that's the perfect plan, but with some graft I think we could get around £17,000 paid off that over the next year.
Does that sound like a sensible plan, or are there some other options we should consider at this time?
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