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FOAK: mortgage advice
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My 5 year fixed rate mortgage with C&G is up for renewal at the end of the
month they've offered a variable rate deal at 6.75%. It is split between an
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No experience (other than their inability to generate Money compatible
files)
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£80k repayment and a £52k endowment with about 9 years to run on the
original 25 year term.
Before I start to call around the usual herd of the banks and building
societies, anyone know any good deals about atm?
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what's currently available. It gives a handy indication of the total
cost over 5 years (or your preferred duration).
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Thanks for any advice or leads.
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Asking for recs on mortages is like asking for recs on bike insurance:
Pointless. Go and check the price comparison sites. And bear in mind that
any deal from a mortgage lender will factor in the lender's expectations of
future movements - so fixed deals + arrangement fee + potential penalty if
you break it are, in the longer term, unlikely to work out any better or
worse than trackers / discounts / caps etc. But if you need the security
of knowing what you'll pay, find the cheapest fix over a term that makes
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Still - bound by the rules
I notice that Citibank now have a comparable rate
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sense to you and don't forget to factor in the (currently ridiculously
spiralling [1]) arrangement fees.
[1] I have a £190k mortgage split over three rates, two of them fixed and
one discounted. All over different terms. And NatWest wants to charge me
£500 to secure a new fix for even the £28k lump, let alone the other bits.
Outrageous, it's about time the regulators put a stop to the practice of
competing on headline rate by ramping up the arrangement fees.
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Why, high arangement fees is a just a response to the mortgage tarts out
there. To be fair, I've only ever had experience of mortgages with
Nationwide. I've just forked out £1500 arrangement fee, but the savings over
the 24mth period are much much more than that, if I'd gone for a rate with a
cheaper arrangement fee. Plus, Nationwide have a policy that if you pay one
arangement fee, you can fix more than one product. So, I've now got an
option for a very low rate on any extra borrowings I may make in the next 6
months [1].
[1] i.e. when we move.
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API/AER calculations for comparison *do* factor in arrangement fees,
over a short, "typical" term, so there's nothing for the regulator to
do here. It's not my fault you can't use a spreadsheet.
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They can't, because they have to assume a 'typical' borrowing, which may be
a wildly different sum for many borrowers, making the AER an irrelevance
for comparison.
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I wrote a spreadsheet in X, for Irix. But there are many out there who've
never seen one, but still need to borrow money to buy their house. The
regulator's job is to ensure equity and transparency for all of them, not
just smug techies.
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Out of interest, what's to stop such people using a pencil and paper to
do the same calcualtions?
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The ability to do basic arithmetic with a pen and paper, on the whole. At
the end of the day, many of us could do it in our heads....but, at the
other end of the day, there a subset of the public who struggle to do more
than pick their nose with a pencil, let alone do sums.
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But of course all lenders are required to provide a Key Facts
Illustration for any[1] mortgage-type loan they're trying to flog, This
quote is specifically for your mortgage and so you can get a quote from
the 23 places you're thinking of going and then compare them easily,
providing you can read. These documents clearly show the fees payable.
Granted, this isn't much use if you're only interested in comparing
them for the period of the mortgage 'feature' (fixed rate period,
capped... whatever) and then switching to another. (Except that you can
use the x payments at y part to make the calcs easier).
[1] Yes, there are exceptions for non-regulated lending etc.
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JB
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We had a good deal with Britannia until we fled the country over the
summer - 10 year fixed, and they're currently offering 5.44%. Our mortgage
at the time was split between repayment (over 10 years) and an endowment and
they were also amenable to altering the ratio between the interest only and
the endowment parts when our endowment policies continued to go further
belly up.
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