Better to overpay on SVR or get a new fixed rate?

MissyS

My fixed rate term with First Active is due to end in 2 months. I have been fixed at 4.95%. I will drop onto the SVR at 1.6% (assuming the rate stays the same for 2 months). Payments will drop from £677 to £492.

Am I better to overpay by £200 a month for as long as the lower SVR lasts, or to get a fixed 5yr for 3.75% (deal for existing customer). I understand 2 yr fixed are not a great idea at the moment.

Thanks

MrC-117

5 year at 3.75% sounds like a pretty good deal. Do you know what the fees are for that yet?

Would the fixed rate allow you to overpay, and is that something you'd like to do?

If you don't mind sharing, people will want to know how much you owe, how long is left and is it a repayment or interest only mortgage? Helps us get a better idea of what might be best for you

dimbo61

A 5 year fix at 3.75% is fantastic and I think you should jump at the chance ( what are the fees ?)
If you can reduce the term by a few years so you are paying almost the same each month as you are now and hence reduce your debt even quicker.
Check if you can overpay and what limit ( ie 10% ) if you can afford to overpay that is GOOD LUCK
Check also to see if its portable if you want to move in a few years !

cbrpaul

Agree with dimbo ,

Lower the term to pay abit more to take into account the overpayments, simple :-)