Mortgage.

[Snadger]

Purchased a project house a couple of years ago and got a two year fixed rate mortgae from Santander.

The house was semi derelict so didn't cost a lot and consequently I have an easily manageable mortgage.

They have now offered me another 2 year fixed rate mortgage with a transfer fee?

I know I should enlist the services of a financial advisor but his/her fees would probably be as much as the transfer fee for shifting the mortgage?

I have had a look around the net and the rate they have offered me doesn't seem too bad? (3.99 % initial rate, cost for comparison is 4.3% APR?)

If my monthly payments aren't going to change would I be better off just sticking with them?

[SarzWix]

My gut feeling is that they wouldn't offer it unless it was to their advantage, so probably worth looking around before accepting. Is there a compare site for mortgages? Moneysupermarket maybe? Or MSE?

[zazen999]

Does it go to tracker + 1% Above base rate or something once the fixed term is over? Ours just has and it means no fee and hopefully the interest will stay at a reasonable rate for the next few years, by which time it will be paid off. We overpay quite a lot each month so it clears even faster.

[Snadger]

Does it go to tracker + 1% Above base rate or something once the fixed term is over? Ours just has and it means no fee and hopefully the interest will stay at a reasonable rate for the next few years, by which time it will be paid off. We overpay quite a lot each month so it clears even faster.

No, its followed by their SVR currently 4.24%.

[Snadger]

My gut feeling is that they wouldn't offer it unless it was to their advantage, so probably worth looking around before accepting. Is there a compare site for mortgages? Moneysupermarket maybe? Or MSE?

My gut feeling was the same as yours.........it would be to their advantage methinks.

[Snadger]

The only 'Fee' I can see is a transfer fee............are these massive? I will ask them personally on Tuesday when they return to work.

[dominic10]

Some independent financial advisors do not charge a fee as they get commission from the lenders but by staying with Santander you might avoid any possible legal and valuation fees which would be in addition to the arrangement fees. (But not all lenders pay commission to mortgage brokers) Just had a look at offset mortgages on Moneysupermarket and they don't do our deal anymore (which was through the Woolwich in any case). Barclays charge an application fee of £1499!!! for a 2 year fix at 3.29%. If you have the patience to wade through Moneysupermarket it seems a good site.

[taff]

if you do get a financial adviser, ask them if they're whole of market.
I'd get one as long as their fees are paid by the mortgage company. It's what I usually do.
Or ask my mother, she's on the ball

[Hilary B]

If there are fees 'paid by the lender' the amount will beadded to what you owe. They NEVER actually pay it.
If there is any reason for a valuation, that WILL be charged for (probably the same way), because the valuer has to be paid (he/she will probably be an employee of the lending company).
The main thing Santander want is for you to continue to do business with them. Get the figures and work it out for yourself, unless things are totally incomprehensible (they may be) that will be the best deal. If the agreements are full of incomprehensible jargon, paying someone to explain it might be a good deal.

[Snadger]

If there are fees 'paid by the lender' the amount will beadded to what you owe. They NEVER actually pay it.
If there is any reason for a valuation, that WILL be charged for (probably the same way), because the valuer has to be paid (he/she will probably be an employee of the lending company).
The main thing Santander want is for you to continue to do business with them. Get the figures and work it out for yourself, unless things are totally incomprehensible (they may be) that will be the best deal. If the agreements are full of incomprehensible jargon, paying someone to explain it might be a good deal.

Going to ring Santander tomorrow. If they can give me a deal where I am paying a similar ammount to what I'm paying now I'll probably accept it. I will still probably ring Nat West (I also have an acoount with them) and see if they can better the Santander deal before accepting it though.

[Stormforce]

Just be aware also that every time you look into a mortgage and your details are put in then it will go down on your credit score and you could find it harder to get a mortgage.We were told this by a FA when we looked at mortgages a couple of years back.See if they will wave the transfer fee if you stick with them.We have been with Chelsea for the last 5 years and was going to change this year but they offered us a good enough deal to stay with them for another 2 years and we don't have to pay a transfer fee.
You won't lose anything by asking them to wave the fee

[Mikey]

Depending on the cost of the fee Snadger, I'd look at the length of time it would take for their SVR to balance out the reduced rate for a new fixed deal for two years. If that leaves you out of pocket then I'd stay with the SVR, that way you can always ditch it or change mortgage if the rates look like they are going to rise.

I'd did a search using a couple of search engines recently for our mortgage, it worked out that I'd need the interest rates to stay the same for the next 3 years to warrant swapping from our fixed rate to the current low SVR when considering the penalties. Personally I don't think the rates will stay the same for that time period but then I didn't expect them not to rise at some point during this recession.

If only I had a crystal ball, I'd be a lot better off than I am now.

[Chocolate8me]

I like what Stormforce says.

We bought this house 8 months ago & whilst we were house hunting had agreed to do a 5 year fixed rate mortgage which would be taking advantage of the low interest rates.
When it came to dotting the i's & crossing the t's, we decided to not pay the £999 fee and take a chance that interest rates were not going to go up by much in 5 years.

We would only fix when rates begin to rise & the economy starts growing in confidence again.
Why pay for something you don't need to?