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    • Merchandiser2367
    • By Merchandiser2367 16th Jul 17, 2:39 PM
    • 81Posts
    • 836Thanks
    Merchandiser2367
    Would like to be Mortgage free in 10 years - 10yr Fixed rate mortgage vs Over Payment
    • #1
    • 16th Jul 17, 2:39 PM
    Would like to be Mortgage free in 10 years - 10yr Fixed rate mortgage vs Over Payment 16th Jul 17 at 2:39 PM
    Hi guys,

    My wife and I are newbies at this and would like to ask the experts out there what they think?

    Our mortgage renewal is up in 5 months, it will be 21 year term, we are currently paying £737 a month on this. Our house is worth £330,000 and the mortgage would be for £147,000.

    We are thinking about setting it to a 10 year term. What would you advise in the number of years to fix the mortgage?

    The MSE best buy 10 year fixed mortgage would be around £1335 a month which we could afford and still be able to put in savings around £700 a month

    Would a 10 year fixed rate be bad in terms of locking us in with little options? Would it be better to fix for 5 years and then see how things are going?

    Any advice would be much appreciated!

    Thanks
Page 1
    • Merchandiser2367
    • By Merchandiser2367 16th Jul 17, 2:46 PM
    • 81 Posts
    • 836 Thanks
    Merchandiser2367
    • #2
    • 16th Jul 17, 2:46 PM
    • #2
    • 16th Jul 17, 2:46 PM
    Hi guys,

    My wife and I are newbies at this and would like to ask the experts out there what they think?

    Our mortgage renewal is up in 5 months, it will be 21 year term, we are currently paying £737 a month on this. Our house is worth £330,000 and the mortgage would be for £147,000.

    We are thinking about setting it to a 10 year term. What would you advise in the number of years to fix the mortgage?

    The MSE best buy 10 year fixed mortgage would be around £1335 a month which we could afford and still be able to put in savings around £700 a month

    Would a 10 year fixed rate be bad in terms of locking us in with little options? Would it be better to fix for 5 years and then see how things are going?

    Any advice would be much appreciated!

    Thanks
    Originally posted by Merchandiser2367
    Sorry forgot to ask about over payment advice as well!! Would it be better to take a 15 year mortgage term and over pay each month instead??

    Again, we don't have a clue right now so all advice is really welcome!!
    • newgirly
    • By newgirly 16th Jul 17, 4:35 PM
    • 5,772 Posts
    • 39,524 Thanks
    newgirly
    • #3
    • 16th Jul 17, 4:35 PM
    • #3
    • 16th Jul 17, 4:35 PM
    Hi, I wouldn't want to fix for 10 years as unless you are 100% you won't want to move for any reason it could end up being a costly choice. Fixing for 10 years gives you no options to move or extend the term if circumstances change.

    I would go for. 2-5 year fix and go for a mortgage which allows overpayments that allow you to pay it off early, best of luck with what you decide
    MFW 21
    Target for 2017 £38,545 / £14,264 paid so far

    Mortgage £47,330 4 years 8 months left. Total owed £63,993 planning to clear in 24 months
    WW target - 29.5 lb start date 11/5/17 so far 16.5lb lost.
    • Merchandiser2367
    • By Merchandiser2367 16th Jul 17, 5:48 PM
    • 81 Posts
    • 836 Thanks
    Merchandiser2367
    • #4
    • 16th Jul 17, 5:48 PM
    • #4
    • 16th Jul 17, 5:48 PM
    Hi, I wouldn't want to fix for 10 years as unless you are 100% you won't want to move for any reason it could end up being a costly choice. Fixing for 10 years gives you no options to move or extend the term if circumstances change.

    I would go for. 2-5 year fix and go for a mortgage which allows overpayments that allow you to pay it off early, best of luck with what you decide
    Originally posted by newgirly
    Thank you so much for your advice!

    We are 99& certain we are not going to move as our goal is to be mortgage free

    Our thinking of 10 year fix is that mortgage rates are at a historic low and can't get much lower + with brexit coming up, mortgage rates could go up at some point.

    If we fix for 10 years and get it paid off (even with a 15 year term and then over pay the 10 year fix to reduce term to 10 years), we would not have to worry at all about interest rates/brexit etc...

    What do you think?
    • Courgette
    • By Courgette 16th Jul 17, 9:26 PM
    • 1,710 Posts
    • 17,710 Thanks
    Courgette
    • #5
    • 16th Jul 17, 9:26 PM
    • #5
    • 16th Jul 17, 9:26 PM
    What rate are you being offered on a 10 year fix? That's important too
    A reminder to myself: Persistence Pays Off
    Mortgage 1: £95,000 £78,900 at 3.1%
    Mortgage 2 (BTL): £83, 489.15 at 2.99% (I.O.)
    Savings (S&S ISA): £3000 Plus 6 months emergency savings earning 3%
    • louloubelle79
    • By louloubelle79 17th Jul 17, 2:21 PM
    • 167 Posts
    • 67 Thanks
    louloubelle79
    • #6
    • 17th Jul 17, 2:21 PM
    • #6
    • 17th Jul 17, 2:21 PM
    We just fixed for 10 years to hopefully be MF in 10 years, for us it works for us and gives us long term reassurance.
    Hoping to be mortgage free by 2026 age 47
    Current rate 2.79% fixed for 10 years
    Current mortgage end date: 03/10/2043
    MFW Starting Mortgage Jan 17 - £114,703
    • newgirly
    • By newgirly 18th Jul 17, 7:01 AM
    • 5,772 Posts
    • 39,524 Thanks
    newgirly
    • #7
    • 18th Jul 17, 7:01 AM
    • #7
    • 18th Jul 17, 7:01 AM
    I think if it gives you reassurance then it's worth it
    MFW 21
    Target for 2017 £38,545 / £14,264 paid so far

    Mortgage £47,330 4 years 8 months left. Total owed £63,993 planning to clear in 24 months
    WW target - 29.5 lb start date 11/5/17 so far 16.5lb lost.
    • shangaijimmy
    • By shangaijimmy 18th Jul 17, 7:16 AM
    • 2,198 Posts
    • 10,043 Thanks
    shangaijimmy
    • #8
    • 18th Jul 17, 7:16 AM
    • #8
    • 18th Jul 17, 7:16 AM
    Things aren't likely to change too much until brexit is finished and markets have settled, so you may be better of fixing for 2 yrs (with unlimited OP's as newgirly suggests) as you should be able to get about 1.64% rate. Once this is done brexit will still be settling or even still up in the airand you may find a 5 yr fix then will be enough to finish off, and you may get a rate of about 1.99% then. All speculation of course, but this is my plan. We remortgaged in march for 2 yrs and I'm then hoping in March 19 I can fix for 3rs to finish us off. All the while keeping the term length the same to give security in case life changes (job loss, ill health etc...) get in the way. Our current term has 18yrs left but we're hoping for 7-8yrs.
    MFW: Turning June 2036 into March 2023... 30//120 Payments Challenge, Diary Reduction £32,077.72
    Aug 2009: £163,051 // Current: £103,922.28 // Avg Daily Interest £4.67
    MFiT-T4 #8 - 47.86% of £41,000
    • Merchandiser2367
    • By Merchandiser2367 18th Jul 17, 7:56 PM
    • 81 Posts
    • 836 Thanks
    Merchandiser2367
    • #9
    • 18th Jul 17, 7:56 PM
    • #9
    • 18th Jul 17, 7:56 PM
    Things aren't likely to change too much until brexit is finished and markets have settled, so you may be better of fixing for 2 yrs (with unlimited OP's as newgirly suggests) as you should be able to get about 1.64% rate. Once this is done brexit will still be settling or even still up in the airand you may find a 5 yr fix then will be enough to finish off, and you may get a rate of about 1.99% then. All speculation of course, but this is my plan. We remortgaged in march for 2 yrs and I'm then hoping in March 19 I can fix for 3rs to finish us off. All the while keeping the term length the same to give security in case life changes (job loss, ill health etc...) get in the way. Our current term has 18yrs left but we're hoping for 7-8yrs.
    Originally posted by shangaijimmy
    Thanks again everyone for their advice - it seems there are a few ways to do this but as with most things, no certainties!

    I like this plan of shorter fixes but I also like the idea of not to ever think about interest rates etc posing a problem. As Martin Lewis pointed out, pre-credit crunch interest rates were around 7.5%. We all know it will be a long long time before they ever get there again but you never know, a 0.25% rise here and another there, mortgage rates will shoot right up so I think we will go for the certainty route and go for the 10 years Fix.

    Thanks again guys, I now know where we are heading.
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