big house bigger problem (part deux)

struggling-breadwinner

With apologies (am a newbie so let me off) I posted this on house buying/selling but I think it might be a question better posed on this board. Sorry for posting twice tho............

Three years ago we (i) was blinded by beautiful showhome and bought a big house with commensurate mortgage fxied 2 yrs at 3.99% had to re mortgage last year and, in my view, were not given great advice and fixed again for three years at 5.87% (barf ):eek:

We have (as they say on debtfreewannabe board) had our lightbulb moment and realised that we can't sustain thisstandard of living any longer. We have put the houseonthe market and are seeking a downsize.

Qu. Do I port over the fixed rate (part thereof) for the balance of the fix (2yrs) and pay a reduced penalty on the % I am clearing or do I use some equity to pay the penalty for coming off the product entirely and change to say a lifetime tracker? (penalty on whole o/s is £6,600)

We are lucky -ish in so far as previous sensible hosue mvoes have left us with a ortgage equating to 57% of current house value (£320,000 - although this is meaningles if it doesn't sell) I am minded to bite the bullet, use some equity tochange product, clear o/d and credit card and just get on with new much smaller mortgage (possibly judging by the house I like around £150k against £240k currently) and never EVER move again!!!!! But is this a waste of equity. would it be better to put all equity into the house? If i do this cause o the interest I would not be able to make in roads on my debts until 2011 when the fix runs out - assuming teh rate are still favourable then......

Whjy is life so complicated? And why am I, at 35 soooo niaive. Oh and if my dad is reading this SORRY !! ! ! ! I didn't want you to know how bad it was

_Andy_

It would seem like a bad idea to ditch the rate you're on - firstly it's not actually that bad and secondly going on to a tracker would negate what you got the fix for in the first place - payment stability. You mention ERCs of £6k+ which I'm sure would negate any short term saving.
Also a tracker may seem great now whilst base rate is low but it isn't going to stay that low forever.

Conrad

Some people switch to trackers or lower fixed rates despite penalties. Compare your current payment to that which might be available and factor in the charge.

Thrugelmir

struggling-breadwinner wrote: »

With apologies (am a newbie so let me off) I posted this on house buying/selling but I think it might be a question better posed on this board. Sorry for posting twice tho............

Three years ago we (i) was blinded by beautiful showhome and bought a big house with commensurate mortgage fxied 2 yrs at 3.99% had to re mortgage last year and, in my view, were not given great advice and fixed again for three years at 5.87% (barf ):eek:

We have (as they say on debtfreewannabe board) had our lightbulb moment and realised that we can't sustain thisstandard of living any longer. We have put the houseonthe market and are seeking a downsize.

Qu. Do I port over the fixed rate (part thereof) for the balance of the fix (2yrs) and pay a reduced penalty on the % I am clearing or do I use some equity to pay the penalty for coming off the product entirely and change to say a lifetime tracker? (penalty on whole o/s is £6,600)

We are lucky -ish in so far as previous sensible hosue mvoes have left us with a ortgage equating to 57% of current house value (£320,000 - although this is meaningles if it doesn't sell) I am minded to bite the bullet, use some equity tochange product, clear o/d and credit card and just get on with new much smaller mortgage (possibly judging by the house I like around £150k against £240k currently) and never EVER move again!!!!! But is this a waste of equity. would it be better to put all equity into the house? If i do this cause o the interest I would not be able to make in roads on my debts until 2011 when the fix runs out - assuming teh rate are still favourable then......

Whjy is life so complicated? And why am I, at 35 soooo niaive. Oh and if my dad is reading this SORRY !! ! ! ! I didn't want you to know how bad it was

Nothing wrong in having a light bulb moment. :beer:

As long as one learns from mistakes and doesn't repeat them.

Start afresh. Bite the bullet. Take the opportunity the clear your all your debts. This wont be wasting equity.

With the remaing equity and a sensible mortgage buy a house you can comfortably afford.

From this base you will have a far less stressful life and be able to make plans for the future in a thought out and measured way.