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The Alternative Loan 
In the current climate of uncertainty about the UK base rate, it could work to some peoples advantage to take out a home loan that is part-fixed, part-discount, part-tracker.
Second-guessing the movement of interest rates can be tricky. It is a dilemma for people buying a property or remortgaging, but if you are in a quandary about whether to opt for a fix, discount or tracker, mixing and matching could be the answer. Mixing and matching involves having part of your loan on a fixed rate and part on a variable rate, but with the same lender. With there being some uncertainty about whether the base rate will rise again, combining products in this way is becoming more popular. Several mainstream lenders allow mixing and matching but few publicise it. Mixing and matching can be put to good use where the borrower wants to keep some flexibility on part of the loan. For example, they might want the bulk on a fixed-rate mortgage, but want the ability to overpay by more than the chosen fix allows. They could put most on the fixed rate but a portion on a no-penalty deal so that they can repay that portion at any time. This could work well where the proceeds of a sale do not come through simultaneously with the new purchase meaning that a larger mortgage is needed in the short term, but will be repaid as soon as the sale goes through. In some cases, it may be necessary to use mix and match if the maximum loan amount on the deal is not large enough - for example a deal may have a maximum loan size of £250,000 so any additional borrowing could need to be placed on an alternative product. Mixing and matching can also be useful in reducing the fees a borrower pays. For example, if you opt for a low-rate product on a remortgage, it is unlikely that it will include a free valuation and legal work. However, if a portion is placed on a rate that does carry the freebies, then the benefit of this can be had even though the majority of the deal is on the lower rate. If you require any further information about the services that we provide or would like to review your financial planning position, please contact us |