HELP WANTED URGENTLY PLEASE or when ever convenient

5stey

I have a fixed rate mortgage which is due to end in September 2009. I remortgaged in Sept 2007. I've been watching my payments closely and it seems I have only scratched the surface and no major difference has been made:( With the repayment deal coming to and end in Sept 09 is it wise to stay on a repayment mortgage or change. The payments at the moment are £567 over a 35 year period is there a cheaper option?? Any help will be appreciated.:o

chardir

With a repayment mortgage your monthly payments are initially mostly interest. The ratio changes over the life of the mortgage so that it's mostly capital near the end. You can't expect to have paid much of a 35 year mortgage in just over a year.

You will save a lot of money by making overpayments to reduce the term of the mortgage, if you are allowed to on your deal.

beecher

Since you're paying over a 35 year term it will take a long time to start seeing the capital payments decrease. You could shortern the length but your payments will go up. Alternatively you will have to wait til your further into the term to see a real difference - there are some mortgage tools which allow you to see how much capital you throughout the term of your mortgage.

herbiesjp

5stey wrote: »

The payments at the moment are £567 over a 35 year period is there a cheaper option?? Any help will be appreciated.:o

That is the reason why you have only scratched at the actual capital amount.

In the early years the mortgage payments is made up mainly of interest. As the mortgage is over 35 years, you will be paying very little capital indeed from the mortgage.

What do you mean by cheaper option? You could try to go intrerest only, but then you would not be reducing your mortgage amount at all which seemed to trouble you:

I have only scratched the surface and no major difference has been made:(

5stey

sorry you've probably guessed I am new at this (embarrasing i know) what I meant was should I renew my fixed rate mortgage at the end of the term or look for cheaper alternatives if there is such a thing. I would love to reduce payments and I am hoping to save some money to put in the mortgage when the renewal date comes up.

beecher

5stey wrote: »

sorry you've probably guessed I am new at this (embarrasing i know) what I meant was should I renew my fixed rate mortgage at the end of the term or look for cheaper alternatives if there is such a thing. I would love to reduce payments and I am hoping to save some money to put in the mortgage when the renewal date comes up.

Who knows what deals will be available by September 2009 and it'd really depend on what was available, and your own attitude to risk whether you chose another fixed rate or a tracker deal. It also depends on your Loan to Value ratio. Perhaps a good option would be to overpay as much as possible in the meantime and try to cut down the period of the loan, as 35 years is a relatively long term.

savemoney

If your fixed rate ends in September 09 you may have to pay a penalty for changing mortgage before hand, so you have to way this out against any savings to be made on a re mortgage

The only way to decrease your monthly payment would be to either get a better deal, fixed, svr, tracker, interest only, extend the duration of the mortgage, or pay a substantial amount off when you come to re mortgaged