Would this make any difference to our remortgage?

purpleems

Hi Everyone

I posted this originally on the mortgage free wannabe thread but was advised to post it here to see if anyone could offer any advice (so please don't think I'm being greedy by posting twice!).

I have read and researched the relevant articles on here but I'm not 100% sure that I get it! Anyway, here goes....

We have a repayment mortgage of £125k over 33 years at 6.33% fixed for 2 years (runs out in Dec 09). We moved and added £5k (also repayment) onto the mortgage to enable us to get a bigger house which is fixed for 2 years (closest we could get to tying up with main mortgage amount fixed rate ending) at 7.49% (higher rate cos no arrangement fee).

We are due an amount of £4k any day now and I am wondering what to do with it. The house needs a new bathroom desperately which was what we were originally allocating the £4k to (plus some updates in the kitchen - new doors, worktop etc). Now I am wondering whether it is worth using that £4k to pay off some of the mortgage so that when we come to remortage next Dec we owe less, but I'm not actually sure it will make that much difference.

I should also add that with the extra £5k we borrowed it takes our total ltv to 83%. And we are also overpaying by £200 per month.

I think I've mentioned everything but please feel free to ask questions should anything need clarifying.

I would be most grateful for any help and advice as we are trying really hard to get our finances in order during this difficult time

Kind Regards

Em x