Fixed Rate Mortgage - is it worth exiting early?

tcaratella

Hi all, me and my wife are currently into our second year of a fixed rate mortagage at 5.63% for 5 years. With all the cuts in interest rates is it worth paying an exit fee of around £3000 and getting a new mortgage? What rates are expected to be offered by banks? I would appreaciate it if anyone can give us some advice. Many thanks!

HangTime

It's not possible to say for certain without knowing what your outstanding balance is on your mortgage. As a general rule though, the more you owe, the more you'd have to gain from switching (as the exit fee would represent a smaller percentage of the total).

Essentially what you need to do is work out the total cost over the lifetime of your current mortgage. Then, look at alternatives, taking the £3000 fee into consideration, plus any other additional costs/hassle that might be associated with switching.

Also bear in mind that switching to non-fixed product (if that's your intention) does carry a risk in the long-term

_Andy_

Please have a look through recent threads, there have been many, many, many threads exactly the same recently.

getmore4less

HangTime wrote: »

It's not possible to say for certain without knowing what your outstanding balance is on your mortgage. As a general rule though, the more you owe, the more you'd have to gain from switching (as the exit fee would represent a smaller percentage of the total).

Essentially what you need to do is work out the total cost over the lifetime of your current mortgage. Then, look at alternatives, taking the £3000 fee into consideration, plus any other additional costs/hassle that might be associated with switching.

Also bear in mind that switching to non-fixed product (if that's your intention) does carry a risk in the long-term

Actualy you have to carefull using the full term for the comparison.

Where there are term deals you need to look over the time periods involved.

So for this case you are looking at the end of the 5y Fix as the date to compare to.