Remortgaging question

polesana

OH and I are trying to make overpayments where we can (to reduce the term rather than monthly payments) and it's going well so far.
We are currently on a 2-year fixed rate deal which will revert to SVR from next year.
Assuming we can find a better deal and decide to move to another lender and remortgage, should we also be trying to reduce the size of the loan? Or keeping the loan amount the same and borrowing for a shorter term?
Sorry if this has already been asked but I couldn't find an answer when I searched.

Any advice appreciated

Px

dimbo61

If you can do both !
But unless you have a few thousand pounds spare in the bank or under the bed earning little interest I would overpay what you can afford each month.
The good thing about taking a shorter term is that you pay less interest
the bad point is that you are commited to paying a bigger mortgage EVERY single month.
You need an emergency fund say 6/9 months of income and any savings over that could be used to reduce your debt.
If you find that you have £200/£300 spare each and every month then consider reducing the term.
Use "whatthecost" to work out the increase in your mortgage each month by reducing the term by 1/2/3/4/5 years.
Good Luck on becoming MF

polesana

Thanks dimbo, I hadn't used that site before and it was really good to play with the numbers and see what we could pay off if money was no object (well I can dream lol :rolleyes:)