MF i wish

momoney

any tips
mortgage 170k 6.22 fixed for 3 years (just had new baby)

can over pay by £200 a month.
or put this in the bank.

or should i bail out of this rate which will cost me 5k and start a new mortgage (fixed) at 4.65% which will cost me another 1k
then pay off £200 a month on top.?

seems a lot of hassle i worked it out that i would save 2k over a 3 year peiod not paying off £200 a month but it would cost me 6k to do it.

help im confused. thanks:p

StuartGMC

Momoney
Can you confirm you have "ticked all the other boxes" regarding emergency savings and have pension, plus all your annual costs plus allowances for holidays, cars, white goods etc calculated when you state £200 p/m available?

You note you have a new baby (congratulations!); was the other mortgage offer based upon your current situation rather than previous one? Does the £200 above mean you have allowed for any child care costs you will have to pay in future 3yrs?

Assuming "yes" to the above, then it is a simple bit of maths to look at the two scenarios you quote:
1) Present mortgage at 6.22% - I think you would be very unlikely to beat this via savings now! So, provided as above you have all necessary savings and the OP won't be missed, it is probable that OP is the best for your first question.

2) Now you note the alternative mortgage. Do you have the £6k sitting around to pay the fees or will these costs be added to the mortgage sum and thus subject to interest?

Assuming this £6k is in hand; what fee would your present lender charge for a £6k lump sum payment? Then you would be basing the calculations on £164k over 3yrs plus the £200 p/m OP vs the £170k at 4.65%.

Does the new deal still allow the OP of £200 p/m?

Running these via the mortgage calculators should generate your answers (sorry no time now need to eat!)

After 3yrs you will then be looking to a new mortgage so you are right to only look in this time frame if this suits your overall plans.

HTH?