Re-mortgaging

Maundie said:
Ive just had a letter from Santander saying my fixed term is up and I can now change to a different mortgage if I want.

Not sure if I want to as my rate should drop making it cheaper but would anyone advise another fixed term as interest rates haven't risen in over 3 years I think?
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My own mortgage is with Santander and I've just done exactly this. They have some great product transfer rates available at the moment so definitely worth looking into. Their variable rate is currently 4.74% and you can probably half that depending on your loan to value.

Be wary of the fees. They have products with arrangement fees and low interest rates, or products with no fees and sligtly higher rates. Which is best for you will depend upon how much you have outstanding.
 
Orch said:
So no mortgage at present? That is termed Unencumbered.

It's kind of a grey area as to whether it's termed a purchase mortgage or a remortgage to be honest, some lenders consider it one, some the other.

Either way it's a mortgage with transfer of equity. Pretty standard stuff (happens a lot in divorces) so just best bet is to speak to an adviser and explain what you want to do.

Have you and your sister owned the house for more than six months? Do you both live in the house?
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Yep no mortgage at present. We have owned it for a year and I currently live in it but my sister doesn't.

Would like to get a mortgage soon to buy her out.
 
Extend the term or try and move to interest only. Or think of a get rich quick scheme. If it's a sort term glitch speak to the lender they may do something for you in the sort term
 
Also, regarding fixed vs tracker - you're right the base rate hasn't moved for a long time now. I would guess that we are edging closer to a rise but still can't see it around the corner just yet. That's personal opinion though.

Classically, there was a gamble to take with trackers. You could bet against interest rates by taking a lower starting interest rate than would be available fixed, with the gamble being that rates could rise leaving you paying more than if you had fixed, but fingers crossed your rate would remain low or even drop further. The trouble is at the moment, fixed rates are so low, there's no benefit in the gamble. If tracker rates and fixed rates are the same, bar the fact that the tracker could go up, why bother taking it?
 
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LeeUK said:
Yep no mortgage at present. We have owned it for a year and I currently live in it but my sister doesn't.

Would like to get a mortgage soon to buy her out.
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Ok cool. Can be issues remortgaging if you have owned for less than six months but your situation all sounds very standard. You should get the best rates available with a loan to value of 50% too.
 
You need to be very careful

The early years of any loan or mortgage comprises of a higher proportion of interest. This means that if you re-mortgage at a slightly lower rate, you could actually be worse off in the long term. The new deal will start fresh, so again you are paying a lot more internet than actually digging away at the loan.

I think the guardian has a loan calculator which breaks everything down by month. You can see the capital reducing faster in the later years.

That said, we were in a similar situation a few months ago.

We have a santander mortgage which was fixed for 5 years. Personally I like fixed rate deals as I know how much it is every month. They are not for everyone, and they come with an ERC (early repayment charge). This means that if you are not out of the fixed rate deal, you will be stung with a % to end the deal early. This again needs to be taking into account when thinking about looking at a new deal.

Something else to also think about is if you can actually get accepted for a new mortgage. Banks have become stricter when lending money. Just because you got £100k a few years ago, doesn't mean you can now. Worth a phone call.

Lucky for us, Santander had already agreed a better deal for us. When our fixed rate finished, I phoned up to ask the question about getting a better rate. They looked on the computer and noticed it has automatically accepted us for the sale deal, but over 2% less internet. That for us meant a £250 saving a month :D

It's another 5 year fixed which I like. Love the house, kids are settled, both our jobs are secure (public sector education), so it was a no brainer.

I did put the figured through the guardians calculator, and even starting a fresh deal we are saving in the long run as well.
 
Orch said:
Ok cool. Can be issues remortgaging if you have owned for less than six months but your situation all sounds very standard. You should get the best rates available with a loan to value of 50% too.
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Thanks for the help. :)
 
glen8 said:
You need to be very careful

The early years of any loan or mortgage comprises of a higher proportion of interest. This means that if you re-mortgage at a slightly lower rate, you could actually be worse off in the long term.
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Providing the term is the same, that is simply not the case.

The reason you are paying more in interest to start with is simple, you have more outstanding! In 10 years time you'll be paying interest on a lot less money, hence the same monthly repayment will rreduce the capital by a greater amount.

A lower interest rate is a lower interest rate. No catches there.
 
Quick question why the advisors are here. How are you seeing the BTL mortgage market? Growing?

Is it still 110% rent, 25% deposit and an income of over £25k?
 
Vanilla said:
Quick question why the advisors are here. How are you seeing the BTL mortgage market? Growing?

Is it still 110% rent, 25% deposit and an income of over £25k?
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Hmm. BTL are pretty steady with us tbh. Mortgages are only a part of our business however so perhaps another adviser will be able to spot the current trend better.

It's normally 125% rent now, can go down to 20% deposit (a couple perhaps even 15% but I haven't tried) and yes min income of £20-£25 is normal, but again I think there may be a few with no minimums at all.
 
Orch said:
Hmm. BTL are pretty steady with us tbh. Mortgages are only a part of our business however so perhaps another adviser will be able to spot the current trend better.

It's normally 125% rent now, can go down to 20% deposit (a couple perhaps even 15% but I haven't tried) and yes min income of £20-£25 is normal, but again I think there may be a few with no minimums at all.
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Thanks, what kind of % deposit would you have to put down to get the best rates? Is there a sliding scale?
 
Yes there is. The 'steps' vary from lender to lender, but is normally 60, 65, 70, 75 & 80%. Some step up in 10% gaps though. I'll have a quick look at some example rates when I get back to the office.
 
60% and under are in the region of 3.5% - 3.8%

60% to 70% are about 3.8% - 4.5%

70 - 75% are around 3.9% - 5%

80% are few and far between but about 5%.
 
Vanilla said:
Quick question why the advisors are here. How are you seeing the BTL mortgage market? Growing?

Is it still 110% rent, 25% deposit and an income of over £25k?
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Been at work and just got home from football and seems Orch has answered the majority of questions! :)

For BTL it's mixed, 125% for who I work for, 25% deposit and there isn't really an income limit, as long as the property is deemed to be 'self funding' and there aren't too many credit commitments it should be okay as long as it isn't too low.
 
Orch said:
Be wary of the fees. They have products with arrangement fees and low interest rates, or products with no fees and sligtly higher rates. Which is best for you will depend upon how much you have outstanding.
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As an add-on to this, look at the apr % as this takes into account any product fees. Generally speaking the more you have to borrow the more likely the one with the fee will work out cheaper. Always worth checking though, you also have the option to add the product fee onto the loan but this gets hit with interest too.
 
Defy Belief said:
Been at work and just got home from football and seems Orch has answered the majority of questions! :)

For BTL it's mixed, 125% for who I work for, 25% deposit and there isn't really an income limit, as long as the property is deemed to be 'self funding' and there aren't too many credit commitments it should be okay as long as it isn't too low.
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Is it sad that I'm trying to work out who you work for based on your lending criteria :D
 
There is not much a financial advisor can say that Google cannot tell you, in fact I found a far better deal myself.*.
If you are fixed, wait for the period to expire then go on the variable is an option.
Or extend the period of the mortgage.
Could you look elsewhere in your monthly outgoings to cut back a touch? Changing a mortgage when you are mid-term of a plan can cost £££ in fees.

Also I would never add something like carpets onto a mortgage as they wear out. Something like an extension or a brick garage I understand, but no way would I put carpets on there.

*In my experience. Others have found them to be useful.
 
Orch said:
Nonsense.
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Not exactly helpful.

The mortgage market is still largely divided between high arrangement fees and lower interest rates, and higher interest rates and lower arrangement fees.

Remortgaging is not a zero cost exercise. The fact that there are mortgage advisers doing profitable business on it validates that fact. Nobody works for free, and lenders do not take on debt with unknown risk.
 
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