Your Opinion on my situation please

pandhandj

Hello all,

looking for the opinion of people who know something about mortgages, rather than just trusting to my own knowledge. I think i know what the answer is, but any opinions will be gratefully recieved:

2 yr fix ends in Oct (currently 5.49%), SVR is presntly 7.3% - no problems paying the SVR rate. 12 yrs left on current repayment mortgage.

My issue is - we intend to move later on next year, for family reasons, so should i just go onto the SVR for approx 6-9 months, or should i search out a no tie in mortgage and get a better rate than the SVR? If i do do this, will it affect getting another mortage later on next year?

Also, our savings are at about 80% of our oustanding mortgage. Should i pay off the 80% with our savings or keep the cash nice and fluid in the bank, so when we do come to move, it is ready to go and not tied up in a propery that may take months to sell?

thanks in advance for your time!

retireby50

Hi there,

I would definitely go on the SVR for the short period, otherwise you are likely to pay 2 lots of fees which would easily exceed any savings you might make on a lower interest rate for a short period.

And, yes, I would keep the money in savings to give you more flexibility and put you in a stronger position when buying.

Reds-on-Sea

what about the HSBC fee free tracker? That would knock at least a percent off..

Toughluck

Can youo not find products suitable to yourself that do not incur set up costs as well as no redemption charges, only the bog standard exit fee? I am sure that rate would be lower than what you are quoting.

If you are clean, then as someone mentioned HSBC or Woolwich are doing something along these lines at present.

pandhandj

thanks to all above. I have been looking at the HSBC trackers!

However, the thing i'm unsure about is if i re-mortgage my present house in October, will that have any negative effect on trying to get another new mortgage next year if we move house?

_Andy_

Well the HSBC mortgages are portable so assuming nothing changed in your situation in the meantime (income, credit history etc) you can take the mortgage to the new home gratis.

JimmyTheWig

pandhandj wrote: »

Also, our savings are at about 80% of our oustanding mortgage. Should i pay off the 80% with our savings or keep the cash nice and fluid in the bank, so when we do come to move, it is ready to go and not tied up in a propery that may take months to sell?

I would say that you are probably best putting any savings that you are paying tax on the interest against the mortgage.
So keep as much money in cash ISAs as you can. If you (and/or your spouse if you have one) don't pay income tax then keep all your savings. You can earn 6.5% on them. I know this isn't as good as 7.3% SVR, but it's a "premium for liquidity".
But if you're paying 20% tax on interest, even if you're getting 6.5%, the best returns you can hope for are 5.2%. That doesn't compare well with paying 7.3% on your mortgage.

Alternatively you need to have a serious think about how much cash you might need to hand. Remember that in this climate it might take a year to sell your house. Once you've got this figure double it. Keep this in savings and use the rest against your mortgage.
This may well take your mortgage down low enough to make a remortgage unnecessary.