Should I Ditch my Northern Rock 5yr Fix?????

galasteve

Hi there, :beer: this is my first post, and its quite a biggie, so heregoes

I have tried to evaluate for myself whether switching to a tracker is best for me, however, I cant seem to come to a decision. SO - I thought, who better to ask than the MSE board. Im just wondering if you guys could point me in the right direction.

Here's the details,

I have a fixed rate until 1/6/2011 @ 6.19% with northern rock - currently the balance is 53000 - the term is for another 22 yrs 0 months
the exit fees are 1567.50 for early repayment which runs until 1/6/2011
however, I also have an early exit fee (£1000) for 'help with costs' which runs out on 25/11/2009

My house is worth around 75000 (next door have identical house and its up for sale at that price)

About me - I live in Scotland, am 24yo and would be taking it out with my partner who is 26.
I earn about 20000 and she is about to finish uni and currently earns about 6-8000.
I have no savings to pay off debt

I would like to pay off a new motgage at the same length or sooner if it is feasible.

What I am wondering is - should I take out a cheaper rate tracker mortgage (eg 1st Direct) now or should I wait for my first penalty to run out (the 1000) or just stick it out until the fix rate ends (bearing in mind that is when the economy SHOULD be back up and running and interest rates increasing etc).

Thanks in advance for any help,

Regards
Steve

nw_man

I havent done any calculations ( in a rush sorry ) , but I doubt that any saving you will make on a £53000 mortgage on a new deal with a new lender will compensate for the exit penalty and the help with cost fee.

Also any new deal is likely to have an arrangement fee so you can add that to those costs too.

Rough costs for you would be £3000 - £3500 and these would have to made up over a 2-2.5 year period.

Finally, dont forget any tracker deal you go on to, may go up in the next two years, depending of course on what interest rates do.

And they cant go down much.........