Switching Mortage

[BAN5HEE]

Hi Guys. Anyone know of a good mortage company doing a some deals out there? Who are you with? I am with Northern Rock and got stuck in a 7 year tie in that expired this year so I can now finally get out of after the rate has gone up to 7.4. I can get a cash loan cheaper for that. Should I approach them and ask them to do a deal or I move or should I just find another company that offers a lower rate?

[Kebabhead]

I recently switched mortgage lender from Leeds Building Society to Britannia

I used moneysupermarket.com to find me the best deal on a fixed rate mortgage.

One thing to watch out for is remortgage fees. Some of the best deals out there also have some of the highest fees in somecases it can cost you almost a grand to change

[unique]

have a look at the motley fool website - www.fool.co.uk i think, and www.moneysavingexpert.co.uk i think thats the link as thats mostly the info they deal with. i thought northern rock was supposed to be one of the best. i don't have a great deal percentage wise, but my bank gave me more money than anyone else would, which was essential for a first time buyer

[bitofatit]

Whilst N.rock are a reputable company getting you tied into a 7 year deal will invariably be more helpful to them than you. I would do as you suggest - find a few cheaper deals, read the small print in terms of tie-ins, fees chargable to secure the mortgage etc - you have to consider the whole cost of the period whatever that be (say) a 3, 5 10 year fix. Certainly I wouldn't stay anywhere where you are paying the building societies standard interest rate as you appear to be doing now.
Anyway armed with that info it may be worth asking your existing lender the question about a deal to match the best you have found. TBH I think they would likely not match the best and rely on you inertia to stay with them.
Another thought is to do it NOW as there is by all accounts a further interest rate rise due possible - next month!

[breszh]

I'm currently with First Direct, on their variable rate currently 6.25% with an offset mortgage.

I'm thinking of switching to a 7yr fixed, its a 5.39% rate and will cost £395 to switch (£795 for new customers). I've had a look at some of the other main lenders and they seem to have higher rates and higher transfer rates, I saw one Halifax fixed with a transfer cost of £1999 and the rate wasn't as good either.

Still pondering what to do, it seems like a good idea at the moment, with interest rates on the up. Even if the rate fell to the lowest of recent times of 3.25% FD would be charging 4.25 for their base rate so would be just 1% over so not too much of a loss I suppose.

Decisions, decisions!

[BAN5HEE]

[QUOTE=breszh;4147452]I'm currently with First Direct, on their variable rate currently 6.25% with an offset mortgage.QUOTE]

I have been taking a look at the offset mortages. Aren't you happy with yours? They seem to be a good idea if you can save a bit of money every month...

[breszh]

[QUOTE=BAN5HEE;4147790]

Originally Posted by breszh

I'm currently with First Direct, on their variable rate currently 6.25% with an offset mortgage.QUOTE]

I have been taking a look at the offset mortages. Aren't you happy with yours? They seem to be a good idea if you can save a bit of money every month...

Yeah, I'm quite happy with it, and will be sticking with it but at a fixed rate rather than the variable rate - pretty good as its a drop from 6.25% to 5.39%. I looked around the other companies just to see if I was missing out on anything, I don't think I am.

I don't have a great deal of savings but the offset part of it saved me around £400 last year according to the online annual report I can view.

Not sure if you seen this site http://www.jeacle.ie/mortgage/uk/ but its useful for seeing what effect overpayments and changes in interest rates make. Mr Jeacle seems to improve it every year too.

[Sporran]

im just in the proces of moving from halifax to woolwich (thourhg barclays) and should complete on monday.

Doing a 10 yr fixed at 4.9%, mortgage will be no more then too

Halifax offered me 6.3, yer right!!!

[BAN5HEE]

Originally Posted by Sporran

im just in the proces of moving from halifax to woolwich (thourhg barclays) and should complete on monday.

Doing a 10 yr fixed at 4.9%, mortgage will be no more then too

Halifax offered me 6.3, yer right!!!

Wow that's not bad, are there any penalties and if you want to move house can you take the Mortage with you?

[Sporran]

there are penalties, which will post up as the paperwork is here somwhere. I had to pay 595 to have the mortgage.

Not sure about moving house as i didnt ask that as i have no intension to move All i knew was that you had to have a barclays account.

Just checked their site looks like they have withdrawn that offer now,

http://www.personal.barclays.co.uk/B..._self&site=pfs

So i was just in time *phew*

[imightbewrong]

That is a good deal indeed Sporran.

We're with Northern Rock on a 15 year 4.85% fix - there are no overpayment penalties so it's effectively an offset but without the interest rate premium you often get. (It's a 'flexi-fixed' mortgage). Also moving house is no problem as long as the new property meets their lending criteria.

It cost 1000 quid to arrange but they gave us a 1000 quid 'gift' which we keep as long as we keep the mortgage for at least three years.

Seemed like a pretty good deal all round.

I think the same mortgage is on offer at at about 5.7% now.

[Sporran]

oh i can ocerpay 5% of the balance each year which i intend to take advantage of.

TBH i was quite surprised when barclays offered me this mortgage, i always had it in my head tha tthe big high street banks were always the more expensive

I was wrong!

[BAN5HEE]

Originally Posted by imightbewrong

That is a good deal indeed Sporran.

We're with Northern Rock on a 15 year 4.85% fix - there are no overpayment penalties so it's effectively an offset but without the interest rate premium you often get. (It's a 'flexi-fixed' mortgage). Also moving house is no problem as long as the new property meets their lending criteria.

It cost 1000 quid to arrange but they gave us a 1000 quid 'gift' which we keep as long as we keep the mortgage for at least three years.

Seemed like a pretty good deal all round.

I think the same mortgage is on offer at at about 5.7% now.

That's not too bad either. As I am with Northern Rock I may ask them about that before jumping ship.

[RMCF]

Does anyone have ay experience of offset mortgages?

I have been hearing a lot about these recently and was wondering if it might be worth switching to one. I am sure there are terms and conditions as per usual but anything that would knock a year or two off the term would be helpful.

[imightbewrong]

Originally Posted by RMCF

Does anyone have ay experience of offset mortgages?

I have been hearing a lot about these recently and was wondering if it might be worth switching to one. I am sure there are terms and conditions as per usual but anything that would knock a year or two off the term would be helpful.

You generally have to pay a higher rate of interest for offset mortgages - it's normally said that you need to have 50-60% of your mortgage offset to benefit. The higher your rate of tax, the less you need to offset with to benefit.

It all depends on how much you have to offset with. For example if a couple had an extra 500 quid a month to overpay with, they would probably be better to take a cheaper non-offset mortgage and putting the money in their cash ISAs, taking them to the 3000 quid limit each.

As has been mentioned www.fool.co.uk has calculators and people who know a lot about these sorts of products.

(I think they're a good idea in principle, but I get a bit cross when their promotional blurb says 'When you offset money with our mortgage, your saving are effectively earning 6% tax free'. This is true, but it's a pretty optimistic way of putting it. If their mortgage was 15%, your savings would be 'earning' 15% interest by offsetting by that method of thinking. You have to imagine that when offsetting your savings are earning money at the rate of the cheapest normal mortgage, because that's the real alternative)

I've gone on a bit there - there are also normal mortgages which allow you to overpay - unless you've got stacks of cash these are probably the best way to go.