A New Deal or SVR?

macgirl

Evening all
I received a letter today from Natwest offering me news of new deals.
My current NW mortgage ends 31st Jan and the interest rate is fixed at 5.69%.

We have 10 years left on the the mortgage, but want to up the payments and cut that down to 7 years.
I saw a deal on their website at 3.59% for 2 years with a £199 arrangement fee, which - without shopping around looks ok. (There's also a 5yr fix at 4.89%) Then, the advisor mentioned the SVR which is currently 4%.

It's not something I'd ever considered, as money is tight and I sleep easier knowing what we have to pay.
However, we have £150 per month back during term time for Pre-School funding for our youngest and I wonder whether we might be better to go onto the SVR for a few months next year, try to overypay and then switch to a fix rate....

LTV is 56%, the mortgage is in my sole name and as I have significant personal debt, I realise sticking with my current lender would be easier til it's paid off...
The other thing is, in an ideal World (and a Lotto win), we'd like to move house and rent this one out
Any thoughts would be most welcome, thanks

opinions4u

1) From the options listed, the 4.89% for 5 years is the one that appeals to me. Their web site states that they will accept overpayments of "10% of outstanding mortgage balance each year without extra charge"

2) Why are you looking to overpay your mortgage and/or reducing the mortgage term? Surely you would be far better served paying money off whichever credit card is charging you the highest rate.

macgirl

Hi, thanks for your reply - an ex-bank manager no less - I'm honoured!

It's a long boring story, but basically the debt was incurred by me, not my OH, so I'd rather use joint finances for household bills and everything else towards my debts.

Thanks for your opinion, definitely food for thought

Thrugelmir

macgirl wrote: »

It's a long boring story, but basically the debt was incurred by me, not my OH, so I'd rather use joint finances for household bills and everything else towards my debts.

I would be more concerned about interest rates on personal debt than the mortgage.

The sooner you reduce personal debt the sooner you can increase your mortgage repayments.

Clear most expensive debt first.