Hi,

I have 2 fixed rate mortgages with the C&G, the first is coming to an end on Apr 08' and the 2nd Apr 09'.

I am now looking to remortgage in order to fund an extention. I anticipate that the value of the house at present is approx £210,000 and the total mortgage is around £95k.

There will be a 1% redemption penalty on 50% of the mortgage.

I will be looking to borrow a maximum of £130,000.

What would you suggest is our best course of action to remortage the total amount?

Many thanks.

Yorkshire are coming up the best value...free val, free legal, 995 arr.fee. 4.98% fixed for 2 years. Although new rates will be coming out from other lenders shortly.

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Regards

Ian

completefinance:Yorkshire are coming up the best value...free val, free legal, 995 arr.fee. 4.98% fixed for 2 years. Although new rates will be coming out from other lenders shortly.

Thanks for your very quick reply.

I have always gone for fixed rate mortgages in the past, however with the way the economy is at the moment or so we are being told at any rate is a tracker a good idea?

I do like fixed rate mortages however and 4.98% sounds fantastic, but in another 2 years I will have to pay another arangement fee. With the increase in arrangement fees is it beneficial to go for a 5 year term?

If there is a rate cut on 7th February, how long will it be before the mortgage lenders come out with new deals.. I realise that not all of them will cut their rates as well.

Sorry for all the questions, I am clearly very confused at the moment!

People who took trackers 3-6 months ago are going to feel the benefit, the problem is that as the bank rate has fallen the initial rates for trackers have risen, making them less attractive. You are correct that fees have become a pain in the whatever, but if the balance at the end of the fixed rate period is less than a rate with less fees you are still better off. So whatever you decide on fixed wise always check these figures. Five year rates are very attractive at the moment so could be an option? If you decide on a tracker the saving will be relative to the rate and is impossible to work out the same. On the point of further rate changes I think that there will be one or two brave lenders willing to drop rates but I do feel that fixed are going up as lenders try to recoup their losses.

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Regards

Ian

Thanks Ian,

I didn't know that the rates for trackers were less attractive now, thanks for that. I will cross them of the list as I do prefer knowing what I will b e paying for a set period.

I am coming to the end of a 7 year fixed, so a 5 year option is definately something I am considering, especially with the arrangement fees being what they are.

I think it looks like the best option for me is to wait until 7th Feb to see the likely interest rate cut and then chose the best deal by the end of Feb? Unless it is unlikely that mortgage rates will come down further?

There may be a favourable change to 5 year rates and less of an incentive on the 2 year rates. We will expect between 5.2% and 5.5% for 5 year fixed with around 500 fees, I don't think there will too much movement at present though. The 7th will give us the best idea of what is going to happen.

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Regards

Ian

Thanks again Ian. I will keep an eye on 7th Feb and make a decision after that.

Cheers, Gordon

gordonc:

Hi,

I have 2 fixed rate mortgages with the C&G, the first is coming to an end on Apr 08' and the 2nd Apr 09'.

I am now looking to remortgage in order to fund an extention. I anticipate that the value of the house at present is approx £210,000 and the total mortgage is around £95k.

There will be a 1% redemption penalty on 50% of the mortgage.

I will be looking to borrow a maximum of £130,000.

What would you suggest is our best course of action to remortage the total amount?

Many thanks.

It is now decision time..... !

A few more bits of info, I currently earn about 28k and my wife 8k, I am looking to go back to 25 year mortgage and we are living in Scotland. This is hopefully enough to get the 130k we require.

As far as I can see Dunfermline building society are offering the best rates at the moment.

5.29% 5 years, arr fee. £599

5.24% 10 years, arr fee. £599

We would have to pay a valuation fee.

Am I right in thinking this is the best deal at the moment? I am tempted to fix the mortgage for 10 years at the lower rate, is this a bad idea?

Thanks,

Gordon

Hi....the 5 year has a free valuation and the decision is really up to you as to the fixed period?? So hard to give advice on predictions on rate increases and decreases, but I would only tie myself for 5 years...just in case something crops up?

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Regards

Ian

completefinance:Hi....the 5 year has a free valuation and the decision is really up to you as to the fixed period?? So hard to give advice on predictions on rate increases and decreases, but I would only tie myself for 5 years...just in case something crops up?

Thanks Ian.

I didn't notice the free valuation on the 5 year rate, which makes it more appealing. My wife read that the Dunfermline only does 2.75 joint earnings? Do you know if this is correct as we won't be able to get what we require if it is.

Last question, if we can get what we are looking for is it best to apply online or pop in to the branch as there is one nearby.

Gordon

Hi.....4.75 x single + 1 or 3 x joint, so the first calculation would work. Easier through a branch or through a broker, you can't correct errors on line.

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Regards

Ian

completefinance:Hi.....4.75 x single + 1 or 3 x joint, so the first calculation would work. Easier through a branch or through a broker, you can't correct errors on line.

Thanks again.

I have an appointment at 3pm tomorrow, will let you know how I get on :)