Fixed mortgage but offer to move rate?

hairbrain05

I have a joint mortgage on a stinky rate of about 7% which we got just before the interest rates fell..

Recently i got a letter from my bank (who are not my mortgage provider) who say they will be contacting us to discuss potentially moving our mortgage to a lower rate, even if we are on a Fixed rate.

Is this do-able - and if it is is it likely to be worthwhile if any early redemption figures apply?

Thanks

Rossa_3

Depends on what rate they offer, over how long and also all the associated costs i.e. valuation, legals, arrangement fee and redemption figure from your existing lender.

So you need to see what the difference in payments is, add the other costs and see if you still save money over the term left on your current fixed rate.

You also need to compare the rate you would go onto at the end of any offer from your bank and check their redemption penalties too! Otherwise you could end up locked into an even higher monthly payment later on. It's a medium to long term view you need to take on this.

I know you're on a higher rate but I assume you thought it was affordable at the time and therefore it still is, unless you circumstances have changed.

hairbrain05

Yes we did - and my first reaction was not interested, however given the rates have fallen so much i thought maybe worth considering.

I guess you're right & some homework would need to be done to evaluate the long term implications!