Random Offer From Mortgage Company

[scaredycat]

I got a letter from my mortgage company saying they had had a review of their products and can offer us 29,500 off the mortgage if we remortgage with another lender by 14th August, they are waivering the mortgage exit fee, no early repayment fees. Has anyone else heard of this?? They had us tied into a high interest mortgage till late 2010, so why would they do this??!

[buildersmate]

It's charity, of course - these guys are flush with taxpayers' money. Unfortunately I jest. You can be sure it isn't in your best interests - it's merely a question of working out why not.
It's probably because the smart money is on low interest rates for some time to come, by locking you onto a new fixed rate now for several more years at a higher rate than others will offer you in 2010, and appearing to 'let you off' exit fees, they are gambling that you will think you are getting a good deal.
What's their deal?

[scaredycat]

They want us to leave our fixed rate deal and move to another lender.
So it seems like they are just giving us money to leave them?
The company is Advantage- who are owned by Morgan Stanley, so are they just trying to recoup money as soon as possible or what?

[buildersmate]

Yes, but how far is the fixed rate that you currently 'enjoy' being extended for? And what is that rate? - fixed rates taken out say 5 years ago are a damn site higher than current variable rates, because current interest rates are so low.

[scaredycat]

??!! They dont want us to stay with them- there is no offer from them re rates or anything, they want us to leave them, the rate is stupidly high, around 8% I think. If we dont take this offer then the rate stays 8% till 2010 then increases I think

[sandmaster]

If you can transfer at a lower rate do so. But watch out for fees (on top of the interest) your new lender will charge.
It sounds as though your present lender wants to reduce its mortgage book. You also have to consider that they may not renew the mortgage next year anyway.

[scaredycat]

yes thats right, mine is good, partners is bad, so hoping that his dad will come on with me and take my partner off