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  • Mortgages & Finance

    Personal Mortgage

    Evening All, slightly off piste with this one,  I have an offset mortgage arrangement with 17 years left and just over £70k on the loan, we used to have some decent savings which kept our payments down, however these have been spent on house improvements and therefore our repayments have increased, is it worth finding a different deal bearing in mind i would need to pay the interest on the  loan amount again albeit smaller, £70k pays back £90k on most deals on comparison, also as the amount i need to borrow is small their isn't many offerings and the arrangement fees seem to offset any savings that might be made.

    Any advice i would appreciate before going to Broker or Bank

    Jon

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    As I broker I hear exactly what you say. However one of the issues is that you after 17 years definitely not on the same product. Therefore you are paying a higher rate.

    I would suggest you call the existing lender and see if you can just switch to a new product. If not then give brokers a shout but be honest about your concerns.

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    Tax advisor and mortgage broker

    stuart@johnsonsca.com

    02039077022


    Cheers, ill do just that, thank you for your time in replying.

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    Cheers, ill do just that, thank you for your time in replying.

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    horse1uk,

    it  will probably be worth mentioning to your broker that you would like to consider a mortgage with a low or zero arrangement fee, perhaps in conjunction with a free valuation and cashback to pay your legal costs.

    I would steer clear of the free legals aspect, because the lenders panel solicitors get overloaded with work and you can never speak to them.  Our admin team have a dreadful time chasing cases.  You can even make a little on the cashbacks too.  We have access to a fixed price remortgage deal, which for residential cases is £249.  Some lenders are offering £500 cash back or more to cover your legals.  And these conveyancers are have good access and good levels of service.

    Good luck.


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    __________________________________________________________________

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    Hi Jon,

    Totally understand your question and it basically comes down to cost - mainly. 

    Assuming you have no expectations of near future savings to make an offset more useful and if you aren’t using an offset current account for all your banking needs then, if I were in your shoes I would be looking at the best traditional mortgage cost over your chosen product term versus the cost of your offset mortgage over that same product term. 

    This can be tricky as you might want to go for a 5yr fixed rate and your current provider might not offer that (for example).  The way to make that calculation yourself can be tricky as well as you need to look at any up-front costs plus what your monthly payments will be and consider how much of the actual balance is cleared in that product term (as sometimes lenders who charge marginally higher rates actually end up with more of that slightly higher payment coming off the capital balance making it a better deal despite having a higher rate).  So if you consider those factors, together with the relative hassle of a remortgage versus a product switch with your existing lender, then I am sure that the best way forward for you will present itself. 

    A major factor is whether or not your existing lender actually has the kind of product you want so doing some research and deciding what you really want going forwards is half the job done really.  All you need do next if put it into action. 

    Best of luck and have a great weekend!

    Cat

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    Call the PT Broker Hotline on 0333 363 6507 or email us at ptbrokers@johncharcol.co.uk