Still wondering whether I should buy myself out of this fixed rate

Heathwood

Hi all,

I'm currently on a 5yr fixed (6.09%) with Halifax that started in July '08 (i.e. just before the rates dropped through the floor). I am paying £740 pm on a £110k repayment mortgage over 23 years.

Being in my second year of this deal, it will cost just over £4k in charges + redemption fee to remortgage. However, it is still possible to pick up fee free trackers at around 2.5% above base, which would reduce my repayments by atleast £200 pm (my LTV is less than 50%).

So, it seems that within a couple of years I'll have recovered my losses if I remortgage now. I'd use the monthly savings to overpay so should retain a similar O/S balance, despite placing the penalties onto the new loan.

Of course, if BOE base goes up, it'll take me longer to recover, whilst I do currently have the security of a fixed rate I guess. Thing is, I used these reasons not to do anything this time last year and now wish I had.

Am I missing anything? Any thoughts / advice?

Pincher

I think you need the BOE to stay below 3.5% until 2013 to make it worthwhile. Not a good bet.

_Andy_

So increase your debt by £4k to (only hopefully) save £200 a month - plus lose the stability/security of the fixed rate - doesn't seem a good idea.