Remortgaging

ThunderGuts · World Chat Champion Joined: 13 Nov 2018 Karma :

We've settled on a 10 year fixed. Interest rate is fairly competitive, monthly payments are affordable allowing for overpayments (or removal of overpayments if we need to tighten belts). I can't see the BOE base rate dropping by anything anytime soon and if anything it's likely to climb up a bit yet too. I worked out that it only needs to rise by 0.5% to make getting a 5 year fixed at today's rate (followed by the assumption of another 5 year fixed, but affected pro-rata by BOE base rate changes) a more expensive option. Seemed like a no brainer really and all being well with overpayments should last the remainder of the mortgage.
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TG.

arry · Super Spammer Joined: 03 Jan 2009 Karma :

Seems a pretty sensible decision.

Villers · World Chat Champion Joined: 13 Sep 2004 Karma :

Nobby the Bastard · Harley Gaydar Joined: 16 Aug 2013 Karma :

Yep, negative equity is when the amount you would get by realising a house sale won't clear the outstanding balance.

Usually happens when the housing market collapses.

It's not to do with interest.
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P. · Red Rocket Joined: 14 Feb 2008 Karma :

Ah cool cool, thanks for clearing that up Smile

arry · Super Spammer Joined: 03 Jan 2009 Karma :

Villers · World Chat Champion Joined: 13 Sep 2004 Karma :

B5234FT · Brolly Dolly Joined: 28 Sep 2009 Karma :

ThunderGuts · World Chat Champion Joined: 13 Nov 2018 Karma :

Some useful info there, thanks everyone. It does make perfect sense now I think about it, I guess the way it's usually worded (and displayed graphically) makes it seem like it's an erosion of an "interest debt" but in reality, it's interest calculated on a regular basis instead.

Incidentally, I'm pretty glad I got that deal the other week given today's news!
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TG.

Polarbear · Super Spammer Joined: 24 Feb 2007 Karma :

ThunderGuts · World Chat Champion Joined: 13 Nov 2018 Karma :

No indeed! Glad I didn't sit on it for any longer. I anticipate another 0.5-1% over the coming 12-18 months.
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TG.

SmithAnderson · L Plate Warrior Joined: 26 Jun 2023 Karma :

Sorry for bumping the thread. As far as I know, the percentage of the loan dedicated to interest should indeed become smaller over time. When you switch loan providers, the interest percentage is typically calculated based on the remaining loan amount. However, it's important to note that the faster you repay the loan, the less you'll be paying in interest over the long term. That being said, it's always a good idea to consult with specialists when it comes to mortgage-related questions. For example, I usually, reach out to a Mortgage Broker in Huddersfield, but you can choose the one in your area. They have the expertise to guide you through the intricacies of remortgaging and help you make the best decision for your financial goals.

that_impulse_guy · Nitrous Nuisance Joined: 07 Mar 2023 Karma :

Pete. · Super Spammer Joined: 22 Aug 2006 Karma :

DaddyStu · Trackday Trickster Joined: 19 Jan 2023 Karma :

[quote="Pete."]

BaiseMaHache · L Plate Warrior Joined: 27 Jun 2023 Karma :

The payments you make on the new mortgage will be structured based on the remaining term, so the proportion of interest and capital will adjust accordingly. While it's true that the majority of interest is paid at the beginning of a mortgage, switching to a new provider can still be beneficial if they offer a lower interest rate.