Long Fixed Term - Any Thoughts???

GAILEY

I have always been a bit of a worrier and have tried to do what is best so far as money is concerned...but I now have a little dilema so far as my mortgage is concerned and wondered if anybody wise had any thoughts?-
In 2005, mindful of the likely interest rate hikes, I took a 10 year fixed rate mortgage at 4.99%. My mortgage is about £57,500 and costs me about £530 a month, the fixed term ending in 2015 - so far so good BUT..watching GMTV this morning and looking at variable mortgage example of £210,000 mortgage going down to £300 a month, and boding of further reductions I am now wondering if I should fall on my sword, pay the exit fee (which is quite large...about £5000) and go to variable....the exit fee would be clear within about 2 years.......but is there any suggestion that they are likely to increase again within that time, as if so I should just weather the storm..... I wish I knew which way to turn.......
Anybody any thoughts please???

Robert_Sterling_3

At present nobody has a clear idea of what will happen tomorrow, next week or next month let alone in the distant future.

For that reason, as they say on Dragon's Den, I am out .

Peelerfart

"I have always been a bit of a worrier and have tried to do what is best so far as money is concerned..."

You have the certainty of your fixed rate so,as a worrier ,enjoy the surety you have paid for.

You've done the best you can with the information you had ,no-one can predict what will happen.

Personally if I had £5,000 to give to the BS I'd use it to reduce the capital

will-in-estoril

If you are on a repayment mortgage I reckon that you've got around 12 years left.

You've said you are a worrier, but you have got 6 years of not having to worry (ceteris paribus)!!! Your rate will not change.

You have mentioned a £5000 exit charge, but have not included other charges associated with remortgaging, such as legal fees and product charges. Could be well over £6000 once you have included these.

Is there much out there better than what you have? There are very few products around compared to this time last year. Even if you did find something, maybe a tracker, would you worry less or more each month, wondering which way the base rate was going?

Rates are 1% today. What happens if they are 6% in 2 years? The answer is nothing if you stay put.

If you paid a lump sum of £6000 into your mortgage now (you may or may not be able to), but continued to pay the same amount each month your mortgage term would reduce by c.2 years.

I am not a mortgage advisor; all I have done is used a calculator and put myself in your shoes. Ultimately, you will make the decision you feel comfortable with. All I would advise is that when popularist TV programmes like GMTV talk about big savings on a mortgage which you do not have first look at your own circumstances, then decide.

GAILEY

Thanks for your very practical advice.
I am getting myslef in a flap I know I should not be getting myself into. I should be grateful I have some certainty - OH likely to be made redundant next week so certainty is probably good thing to cling to.....also, since posting I was reading of rates others have been offered and mine isn't that bad overall I suppose compared with others.
I will stop flapping, count my blessings and do some work in a morning rather than watching GMTV!!!!
Thanks again

dimbo61

You got a good rate in 2005 and its still a good rate now
Hope your OH does not get made redundant and if you can save 6/9 months worth of income as emergency fund then overpay as much as allowed on mortgage each month with a little luck and good planning plus lots of saving you could be Mortgage Free at the end of the 10 year fix !!

save-a-lot

Try this remortgage calculator http://www.quote-engine.com/remortgage-calculator.html

I based the following on things said in this thread, so here is the result of the above calculator

If you switch from your current 4.99% mortgage to a 3.0% mortgage, your monthly payment will drop by £54.2 and you will save £8080 in interest charges over the life of the mortgage. However, in order for this remortgaging to produce any savings at all you will need to stay in your current home for at least 92 months. That's how long it will take for your monthly payment savings to offset the costs involved in arranging your new mortgage.