Early repayment charge

andys15

I am curently just over 1 year into a fixed rate 5.34%. My early repayment charge is £6767. I phoned my mortgae company a few months ago who said I would go onto the standard variable rate if I switched now at about 3.5%. I have just phoned up now and they said I would actually go onto there based rate tracker of 1.49% above the boe rate. I wish they would have told me that 6 months ago. Anyway in my rough calculations I would save £420 a month, which would take me 16 months to recoup the charge. I know its hard to predict such things, but would anyone advise me to pay the charge which would have to be on credit card and go onto the new mortgage. I would only be able to pay the minimum on my credit card until jun 2011, and then I could pay it off within 5 months.

andys15

Just reading back my post and i would be crazy to do it. BUT if I could get hold of £6767 interest free, would I still be crazy. Just reading about people saying it is a good time to fix. AAARGGGG, why do I always miss the boat on everything.

andys15

I sell my first house in 1999 just before the boom starts, I buy my next house in 2008 just as the house prices starts to crash. I get offered a tracker deal in JUN 08 of .29 above the BOE rate, and I decline because I always felt fixed rates gave me peace of mind. I now want to pay £6767 TO SAVE £420 a month, knowing my luck the BOE rate will be a 7% within 16 months.. I am a S*** Magnet

beecher

As it would take 16 months to recoup your money IF the base rate remains at the same rate I think it would be a bad move. You run the risk of being stuck on an ever increasing tracker while still paying off the ERC from your old deal. It just isn't worth the gamble in my opinion.

5.34% isn't a bad deal at all - rates for LTVs of higher than 75% are higher at the moment.

unite79

agree with Beecher,

beecher

andys15 wrote: »

I sell my first house in 1999 just before the boom starts, I buy my next house in 2008 just as the house prices starts to crash. I get offered a tracker deal in JUN 08 of .29 above the BOE rate, and I decline because I always felt fixed rates gave me peace of mind. I now want to pay £6767 TO SAVE £420 a month, knowing my luck the BOE rate will be a 7% within 16 months.. I am a S*** Magnet

I think you've answered your own question in there. You want security and you have that with your fixed rate. Historically your rate is low so try to keep it in perspective - when you owned a house in the 90s you must've been paying a good bit more in interest.

andys15

so do i. I am just cheesed off. Every financial decision I ever make, seems in hindsight to be a bad one. I am 33 now, I have been a homeowner 3 times, having my first mortgage at 23. I now have a 29 year mortgage(never released equity in any house),and probably just about in negative equity. I feel at 33 and with my house history I should only have about a 15 year mortgage max at my time of life and it really pees me off. Ah well.

andys15

beecher wrote: »

I think you've answered your own question in there. You want security and you have that with your fixed rate. Historically your rate is low so try to keep it in perspective - when you owned a house in the 90s you must've been paying a good bit more in interest.

Well I had a £40000 mortgage paying £312 a month at around 7%. Lol if I still owned that house I could have been mortgage free about 5 years ago.

beecher

andys15 wrote: »

Well I had a £40000 mortgage paying £312 a month at around 7%. Lol if I still owned that house I could have been mortgage free about 5 years ago.

I think you're looking at it the wrong way personally - I don't see how you are in that bad a position. Maybe have a look at some of the fixed rates available out there in order to realise that 5.34% is pretty good.

andys15

i am still weighing up the pros and cons of paying the early repayment fee. This is what is niggling me. I currently pay £1284 per month, of which £1003 go to interest £280 goes on capital, If I go to the tracker then it will be roughly £300 on interest and £500 capital. That is almost making me write the cheque to them. Please help

andys15

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