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Mortgage question

Former MemberFormer Member Posts: 1,876,323 The Mix Honorary Guru
in Home, Law & Money
I expect GWST will be able to help :) but anyone who knows it would be helpful.

On a mortgage you get an introductory rate that is around 5% at the moment. These last for 2 years I think.

After that, is there any penalty if you switch mortgage providers to get another introductory rate? Or is it as simple as switching credit cards every 6 months to avoid the interest rates?

Thanks :)

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    Former MemberFormer Member Posts: 1,876,323 The Mix Honorary Guru
    In most instances you will be done with an 'Early Repayment Charge' as in effect when you switch mortgage providers you are having to pay off the outstanding sum on the mortgage with the old company and then take out the full amount with the new company (not sure if that makes any sense... it does in my head!)

    Not sure but I would imagine introductory rate is for interest only (may be wrong) if this is the case you will have to eventually take the plunge with a repayment mortgage otherwise you will never knock any money off the actual sum... If you are still young though this shouldn't be a problem.

    Have a look around as you may be able to find a reasonable deal on a long term fixed rate - mine is about 5.4% for 10 years (I think!) - the long term fixed rates are becoming harder to find though due to the interest rate rises.

    All of this may be wrong but I think my understanding is correct...

    My last suggestion would be to find a decent Financial Advisor - mine is a godsend and I trust him with everything regarding mortgages/pensions - he isn't fee based so doesn't cost me a penny!
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    Former MemberFormer Member Posts: 1,876,323 The Mix Honorary Guru
    Apart from the normal fees associated with remortgaging, no. I think most people switch their mortgage around to get the best deal. They're not introductory rates though, like you get with credit cards, they're fixed rates, and if they seem too good to be true, they normally are (think huge penalties for early repayment, extra arrangement fees, long fixed terms, etc).

    I'm remortgaging at the moment and although I will save money in the long run, I would point out that it's an almighty hassle.
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    Former MemberFormer Member Posts: 1,876,323 The Mix Honorary Guru
    the long term fixed rates are becoming harder to find though due to the interest rate rises.

    :yes: much suckage, but it has prompted my partner and I to hold off for a while and keep an eye on things. Really good deal you got Spoldgey.

    Do find a good IFA who won't charge.
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    Former MemberFormer Member Posts: 1,876,323 The Mix Honorary Guru
    go_away wrote: »
    :yes: much suckage, but it has prompted my partner and I to hold off for a while and keep an eye on things. Really good deal you got Spoldgey.

    Do find a good IFA who won't charge.

    Just had a think and actually it was over 5 years... still not bad though in the current climate!
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    Former MemberFormer Member Posts: 1,876,323 The Mix Honorary Guru
    .
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    Former MemberFormer Member Posts: 1,876,323 The Mix Honorary Guru
    What everyone else said, just look out for products with nasty overhang ERCs.
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    Former MemberFormer Member Posts: 1,876,323 The Mix Honorary Guru
    Thanks, so basically no early repayment penalties is the way to go then?
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    Former MemberFormer Member Posts: 1,876,323 The Mix Honorary Guru
    Yup but that's hard to find. The better your deposit, the better a deal you're likely to get. Most mortgages will have some kind of tie-in for, at least, the length of the discounted rate. Try to find one that doesn't tie you in after that.
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    Former MemberFormer Member Posts: 1,876,323 The Mix Honorary Guru
    I'd go and see a fee free IFA mate, they'll explain it all in full to you. If you want any recomendations PM me.
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