Should I Re-mortgage or Fall onto the base rate

Legacy_user

Hi Guys,

I couple of years ago I signed up for a two year fixed mortgage at 5.89% I'm just going to drop out of the fixed deal in a few months and Natwest have advised me that now the base rate is so low ( approx. 4.14%), my new payments will be approximately £80 cheaper.
What should I do? Should I just pocket the money and stay on the base rate for a few years or find another deal to lock in for which will cost me a lot more for a month !
Obviously nobody can predict what will happen, but will the rates rise much in the next few years? Enough to mean I'll be paying more per month
Thanks
Andy

boyse7en

Go onto the SVR and use the £80 saving to overpay on the mortgage or put it into an ISA.
Keep an eye on interest rates, if they stay low then you're quids-in and if they start to rise again then get yourself a competitive fixed or tracker when the time comes.

koexelek

boyse7en wrote: »

Go onto the SVR and use the £80 saving to overpay on the mortgage or put it into an ISA.
Keep an eye on interest rates, if they stay low then you're quids-in and if they start to rise again then get yourself a competitive fixed or tracker when the time comes.

Well that is what I am generally advising :T

herbiesjp

It will depend on your actual figures i.e property value and mortgage value

People who are borderline at interest rate tiers, may be better looking at taking a deal while they fit into the lower LTV category/rates.

For example if you are at say 74%LTV you will get one interest rate, however if you go over that level some lenders will at that point (from 75% upwards) increase the interest rate, and then again at the next tier i.e 85%

So if you have plenty equity (and you are certain about your property valuation) then you may want to float on the SVR for a while.

However if you are borderline, you may well be saving money currently, but when rates go up (and your house value will have gone down further) you may find that you are no longer able to get the better re-mortgage deals.

So look carefully into this before deciding

herbiesjp

boyse7en wrote: »

-in and if they start to rise again then get yourself a competitive fixed or tracker when the time comes.

That is if the LTV that you are then at, allows you to get a competitive deal.