Advice needed please

james3005

Hello,

Please can anyone offer me any advice....

I bought my house in June 2007 for 134,500. My mortgage was for 115,000 (over 23 year term) which was fixed at 5.49% for 5 years (till 30/04/12). The early repayment charge (as 31/12/08) is 5,517. The loan outstanding was 110,336 (as 31/12/08).

I also have 3,000 saved which i plan to put in the mortgage and reduce the term to 19 years (plan to do this this week).

I have been trying to work out if i'd be better paying the early repayment charge and getting a lower rate fix (if i could with my LTV) but im not sure.

Any advice/help appreciated. Thank you james

Robert_Sterling_3

Ok here is the answer in a nut shell approximately.

Costs £5,500

1.5% saved in each of 3 years will save you the £5,500

So break even point is a 4% mortgage fixed for 3 years or more with NO arrangement fee.

4% is the break even rate needed to replace the 5.49% you have at present.

If there are extra cost you need a bigger % reduction.

james3005

Thank you very much for reply...