Sell up or stay put

wisdom_please

I have a BIG decision to make and I need help in making the right decision. I am coming to the end of my 3 years fixed rate mortgage.

I would like to sell up completely and repay the mortgage. If I sell now, it may mean selling at a lower price than I paid for it.

If I take another 3 years fixed rate mortgage, it mean staying in an area that I don’t like and if I decide to sell in a year or so, then I will have to pay the early repayment charges.

Mrs_Bumble

If you sell for less will you have enough funds to repay the mortgage in full?

Another 3 year fixed rate isn't your only option for a mortgage deal, when your current deal ends does it revert to the lenders SVR, if so what is that currently? If it isn't too bad you could sit quietly on that for a while.

You could also look at 2 year deals, there are also other deals out there that work out being slightly less than 2 years as well as one year products, so there are more options open to you than 3 years.

wisdom_please

Because I built up a bit of equity in the property, if I sell for less I should have enough funds to repay the mortgage in full. The SVR is currently at 4.24%. (is this good or bad?)

What are the pro and cons for a 2 years deal?

Mrs_Bumble

It isn't as low as some but is it less than you are paying now?

The pros and cons of a two year deal would be that you would have a rate and know what you would be paying for 2 years and the early repayment charges would only be for the 2 years, or less if you take a product for a shorter period of time.

It really, really comes down to what are you likely to do? Are you going to sell? How much longer can you realistically live where you are, if you don't like it?

wisdom_please

The rate that I am currently on is 4.84%, so it is less than what I am paying now. I would like to move out of the area but is coming out of the property ladder a wise thing to do?

Mrs_Bumble

The standard variable rate can be changed by the lender when they want as it isn't linked to the bank base rate at all.

If you come off of the property ladder, will you have money to bank? If so will you continue to increase the deposit to put yourself in a better position? To get back on the property ladder in the future you are going to need a good 25% deposit to get a competitive interest rate.

Have you had any credit history problems?