Would you pay fine to lock in a new deal at better rate

Fatcat_feeder

First of all, hello everyone, this is my first post with MSE .:hello:

Ok, my question is now that base rates have come down so much in recent months, I'm wondering whether to pay my exit fee of £3600 just to lock in a better rate?
My thinking behind this is that the only way rates can go is up especially to try and control inflation?

My details are:

£119.000 owing, Currently interest only, I make over payments when I can so really its effectively a repayment type.:j
Value of property £190.000
Fine for exiting mortgage before 30/06/10 - £3600
Interest rate 6.64%

Now if I were to remortgage for example at 4.44% over 5 yrs I would save £220 P/M which would save £2640 over the next 12 mths leaving me with a loss of £960 when including the fine.

The big question is, although I would be taking a loss, I could secure a good rate at todays low levels. In 12 mths time they could return to 6.6% again costing me an extra £2640 PA or £13200 over 5 years

I look forward to your thoughts on this one.

Many thanks :money:

beecher

Have you seen a 4.44% 5 year deal? What's the fee attached as you have to factor that in too? Also does your Early Repayment Charge decrease after June of this year - sometimes they're graduated.

Fatcat_feeder

Hi beecher, Thanks for your response. :hello:

Yes I have seen a 4.44% 5 year deal with the Halifax, details on their website.

Sorry I made a mistake I should have stated £3600 after 30/6/09 untill the deal ends in 30/6/10.

Set up charge of £900. ( However I haven't included this as I would have to pay this in 13 mths time when I remortgage. :think:

Thanks again :money:

beecher

So you're presently a Halifax customer? The 4.44% deal is for those with an LTV of lower than 60% - yours is higher than that from the figures you've given. I'd phone Halifax and check which deals you're entitled to - think 4.69% is more likely. In addition, they may value your property lower than you hope.

deano72_2

i just got quote with halifax with 71% ltv,,they offered 4.69% for fixed 5yr
abbey offered the same but with about 1k less fees & evalouation combined..might be of use to you