new mortgage at high rate - should I change?

pipmaz1

I am into the second month of a part repayment, part interest only mortgage at 6.39%. I have £92,997 on interest only and £38,000 on repayment. I am obviously not going to have paid much off the repayment element of the loan at the end of the 2 year fixed rate. I have checked out some new rates, mainly with the Abbey, who I was with and they're offering 4.49% which means I could have a full repayment mortgage for the same amount per month as I'm paying now. My early redemption fees would be £2600 if I repaid my current mortgage now, I'm really at a loss as to what to do??

dunstonh

I'm really at a loss as to what to do??

Easy. If you paid the £2600 ERC and other redemption costs and then paid the arrangement fees on the alternatives, would you recover these within the 23 months left you have on the tie in if you switched to another deal?

pipmaz1

thank you for your swift and helpful reply - however...how can I find out how much I would have repaid (i.e. what would my outstanding loan amount then be?)on a 4.49% repayment mortgage at £130,000,over 2 or 3 years to work out how much I will have paid off my mortgage?

beecher

pipmaz1 wrote: »

thank you for your swift and helpful reply - however...how can I find out how much I would have repaid (i.e. what would my outstanding loan amount then be?)on a 4.49% repayment mortgage at £130,000,over 2 or 3 years to work out how much I will have paid off my mortgage?

Use http://www.moneymadeclear.fsa.gov.uk/tools.aspx?Tool=mortgage_calculator

making sure you get the length of term correct (15/20 years). Work out how much you'd pay over 2 or 3 years, compare it to how much you'd pay on the higher rate and see if you'd save enough to recoup the £2600 plus new arrangement costs.