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Mortgages Discussions on choosing a mortgages and mortgage options available.

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Old 29-10-2016, 08:52 PM
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Join Date: Oct 2016
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Default Remortgage, is there something I'm missing?

Hi, I'm preparing for my fist remortgage, after 2 years in a fixed interest product, we are looking into signing for another 2 years. After searching the web, these are my two preferred choices:
-2years fixed at 1.68%, followed by variable at 4.05%. No fee. Payment of 750/month
-2years fixed at 1.36%, followed by variable at 3.65%. 970 fee. Payment of 711/month

You'll see that if you split the 970 fee into 24months, we get to pretty much the same monthly split as the first choice, so this makes th we two products equally convenient, except because I don't know if the follow up variable would have any impact!?!?!? I don't really understand how banks calculate how much you pay into interest or capital. Would a higher variable mean that the bank will change you a higher fraction of interests per month and therefore you would be contributing less to your repayment???

Help!!

Thanks!
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Old 01-11-2016, 06:55 PM
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Join Date: Nov 2013
Location: Hong Kong
Posts: 154
Default Re: Remortgage, is there something I'm missing?

Hi Socopower,

Its basically comes down to the APR or annual percentage rate. The government makes financial product suppliers quote the APR which is basically any fees associated with taking in this case a mortgage that they are added so you can see the difference in fees against no fees.

The variable doesnt matter as when you come to the end of your fixed rate you would then take another fixed period mortgage whether that be fixed or variable. You will see that as you pay a fee they are giving you a cheaper rate thereby reducing your monthly payments.

Hope that helps

Ged Ward
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Old 01-11-2016, 07:15 PM
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Default Re: Remortgage, is there something I'm missing?

Thanks for your answer. That's what I thought, but good to have reassurance!
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