Remortgaging, for less than our current 5% fixed rate?

[King Herald]

We have a 5% fixed mortgage, locked in for five more years, two years gone by already.

So, now the general mortgage interest rate is less than half that, is it possible/wise/clever/obligatory to try and reshuffle things to a lower rate?

We're with Cheltenham and Gloucester, and I'm stuck on a ship for four more weeks, with no details, or paperwork, so please, no '"Phone them up" advise.

Are there usually huge penalties and clauses and such if you try to do this, or is it worth trying to renegotiate a better rate.

We still owe about £75k, paying over 18 years, and I currently overpay £200 a month to get it down quicker.

[barney123]

In my experience, I expect negotiating with terrorists is easer than negotiating with a BS.

They are so tied up in FSA regulations, you cannot have a sensible conversation with them or 'do a deal' to keep your business.

Edited by barney123 on Tuesday 24th February 12:34

[Rude-boy]

I don't think you will get out of that without paying a very painful Early Repayment Charge.

Personally i wouldn't be crying too much if i were fixed in at that rate for the next 5 years. I wouldn't be singing about it, but it isn't the worst and at least you know what your commitments are.

Right now who the hell knows which way this is going to blow? sure as hell it isn't going to go down by as much as it could go up.

[anonymous-user]

Your details are very similar to mine, the ERC for ours was £2500, although that will drop to £1800(i'm told!) at the end of this month. In reality the only deals worth going for are trackers as fixed rates are still around 5%. Are you borrowing more or just looking to get a better deal?

[Herman Toothrot]

King Herald said:

We have a 5% fixed mortgage, locked in for five more years, two years gone by already.

So, now the general mortgage interest rate is less than half that, is it possible/wise/clever/obligatory to try and reshuffle things to a lower rate?

We're with Cheltenham and Gloucester, and I'm stuck on a ship for four more weeks, with no details, or paperwork, so please, no '"Phone them up" advise.

Are there usually huge penalties and clauses and such if you try to do this, or is it worth trying to renegotiate a better rate.

We still owe about £75k, paying over 18 years, and I currently overpay £200 a month to get it down quicker.

C&G standard variable is 3% curently, ask if you can pay a fee and drop out of your fixed 5%?

[miniman]

Just went through exactly this with C&G. The penalty to get out of my current fixed rate was WAY in excess of any savings over the same period from moving to a lower rate. In any case, you need a really low LTV to get much below 5% anyway. They aren't offering variable rates at all.

[Herman Toothrot]

Dave_ST220 said:

Your details are very similar to mine, the ERC for ours was £2500, although that will drop to £1800(i'm told!) at the end of this month. In reality the only deals worth going for are trackers as fixed rates are still around 5%. Are you borrowing more or just looking to get a better deal?

Don't know where you guys are looking but Natwest last week were offering 3.75% with a £700 fee for fixed rate. C&G 4% with £500 fee, there are loads around the 4% figure assuming you'll pay between £500 and £1K fee.

[King Herald]

Herman Toothrot said:

C&G standard variable is 3% currently, ask if you can pay a fee and drop out of your fixed 5%?

I'm very wary of non-fixed rates, so I guess I'm being a bit greedy, but I'm hoping to get a lower fixed rate.

miniman said:

Just went through exactly this with C&G. The penalty to get out of my current fixed rate was WAY in excess of any savings over the same period from moving to a lower rate. In any case, you need a really low LTV to get much below 5% anyway. They aren't offering variable rates at all.

That was what I was worried about, that I'd not actually gain anything in the long term, after paying the penalties. It would be nice to get something like 2% fixed for a few years..........

LTV; The house cost us 150k, so we own about 50% of it now. 50% LTV?


I'm guessing, but if you renegotiate a better deal do you basically have to pay off your current mortgage and re-start a complete new one, or do they just jumble figures around? I got our statement last week and it said something about £3100++ ERP, to pay off the loan early. We'd need a healthy rate drop to recoup that cost.

[miniman]

They either "port" an existing rate, or repay and start a new one. If you are buying a house, they will port over a rate and not charge you setup / penalties etc. For a straight remortgate, you are right, over the course of a 2-4 year fix, you will have to get a crazy low rate to recoup that amount of penalty. 50% LTV will get you the best rates, though. I missed out by about 2% sadly.

[anonymous-user]

Herman Toothrot said:

Dave_ST220 said:

Your details are very similar to mine, the ERC for ours was £2500, although that will drop to £1800(i'm told!) at the end of this month. In reality the only deals worth going for are trackers as fixed rates are still around 5%. Are you borrowing more or just looking to get a better deal?

Don't know where you guys are looking but Natwest last week were offering 3.75% with a £700 fee for fixed rate. C&G 4% with £500 fee, there are loads around the 4% figure assuming you'll pay between £500 and £1K fee.

I'm looking at 10 years fixed, i see no point in 2 years- i have a nasty feeling that would drop me right in the st.

[King Herald]

Dave_ST220 said:

Herman Toothrot said:

Dave_ST220 said:

Your details are very similar to mine, the ERC for ours was £2500, although that will drop to £1800(i'm told!) at the end of this month. In reality the only deals worth going for are trackers as fixed rates are still around 5%. Are you borrowing more or just looking to get a better deal?

Don't know where you guys are looking but Natwest last week were offering 3.75% with a £700 fee for fixed rate. C&G 4% with £500 fee, there are loads around the 4% figure assuming you'll pay between £500 and £1K fee.

I'm looking at 10 years fixed, i see no point in 2 years- i have a nasty feeling that would drop me right in the st.

10 years, fixed at 4% would make a hell of a difference to what we pay. I think our current repayment consists of about £280 interest a month, £300 capital, forget the minutia right now, but an interest drop of 1% only saves us £40 a month, so just a couple of years fixed would be no use.