Mortgage Round Up

Welcome to our regular update on Mortgages.

Mortgages and Mortgage deals are constantly changing and so should you be interested in a obtaining a mortgage (be it for a First Time Buyer, Mover or re-mortgage), getting the right deal is vital.

Here at Box Financial Planning, we are here to help ensure you get the right mortgage for you.

This week, we are looking at several mortgages, which are available to the Home Mover.

The following information should not be taken as a recommendation and all mortgages are subject to status.

All mortgages are based on a Property Value of £300,000 and the borrower wishing to re-mortgage for an amount of either £225,000 (75% ‘Loan to Value’) or £270,000 (90% ‘Loan to Value’) or £200,000 (66.67% Loan to Value’) – and highlight some of the better deals currently available!

Type Initial Interest Rate Initial Period Loan to Value Arrangement/Booking Fee Final Interest Rate
Fixed 2.29% 2 Years 75% £1,499 3.99%
Discount 1.74% 2 Years 75% £995 5.19%
Tracker 3.19% - 75% £495 3.19%
Fixed 3.99% 2 Years 90% £499 3.99%
Discount 2.49% 2 Years 90% £995 5.19%
Tracker 4.49% 2 Years 90% £495 4.74%
Variable 3.88% - 66.67% £999 3.88%

Details correct as at 01/09/14

Some of the above mortgages include additional features such as ‘Cash Back’ on completion or free valuations.

Regrettably, one thing that is starting to return is Tracker Mortgages – which are not based on the Bank of England Base rate – but are actually based on the lenders own internal rate (which may or may not track the Bank of England Rate).

The shown 75% LTV mortgage is a true tracker – the 90% one isn’t. Therefore, care does need to be taken if a borrower obtains a tracker mortgage and then several years down the line, finds out they don’t seem to be tracking anything (other than the lenders profits!). There may be times when this approach is acceptable (90% LTV trackers are very limited at the moment), but whereever possible, if a tracker is the preferred options, one tracking the Bank of England rate should be obtained.

In addition to the Arrangement/Booking Fees, there will be other costs such a Legal and Valuation costs as well as any agreed advice fees (our normal fee is 0.35% of the Mortgage Value although we do have some special deals on at the moment which may reduce this and some lenders may pay a procuration fee, which will cover some or all of this fee) which will therefore also need to be paid.

As a reminder, the initial rate is not necessarily the most important rate and therefore all three aspects (Setting up Costs, Interest Rate and Final Rate) and your personal situation needs to be taken into account, to ensure you end up with the most appropriate mortgage.

Our initial meeting/discussions are without charge or obligation, so please contact us should you wish to avail yourself of our whole of market, mortgage review service.

Next time, we will be looking at some different mortgages and home purchase arrangements.

Interest rates can rise as well as fall and the post Discount/Fixed Periods may be higher or lower than stated.

Your home may be repossessed if you do not keep up repayments on your mortgage.