Fixed rate high interest rate should i change now?

jlg1

Hi everyone,

We have been viewing the forum for a week or so now and am just posting to get some views on my situation and if it might be wise to get out of our current deal and start a new one.

Basically - we are in a 3 year fixed rate deal at 6.2% paying over £600 per month on a £107,500 mortgage over 40 years. Only £56 quid is coming off the mortgage at present per month. Deal ends August 2011.

The penalties for leaving this mortgage are £2150 clear.

We are thinking of paying the fee and moving to either a tracker or sv rate if possible.

We are wondering are we wise in doing this?

We think our house (5 bedroom semi detahced) is worth approx £130,000 - £150,000..

We have been quoted by the current lender £107,500 over 40 years 3.79% tracker - at £435 per month or same over 25 years at £535 per month.

Obviously we will be searching the market and not just taking this offer.....

Just dont know is it wise to move?.

Anyone any thoughts on this - is it a wsie move?

Cheers

J

Peelerfart

Tried this ?

http://www.moneysavingexpert.com/mortgages/fixed-discount-mortgage-guide#calc

jlg1

Hi,

Thanks for the link - I had tried ohter mortage calculators but they were extremely basic. Thats a bit of food for thought....

I had been offered a deal with less than 4.48 so I dont know....

James

Niv

I did a calculation just about 1 month ago and I seemd to save some money IF i get a rate of 3% (just a figure taken from moneysupermarket), however it worked out that I would save £23 per month (calculated until my fixed term would end) and I did not take into account any set up fees of any new mortgage but did calculate in the penalty for leaving early. So bearing all that in mind I decided it was not worth the hasstle and possibly after set up costs it would save me even less.

dimbo61

Tracker rates will go up and so will your mortgage payment.
You also need to add the exit fee, new set up fees, ERC and other fees IE solictor,searches,survey to the mix and would need a very good deal in order to make it pay.
If you have any spare money then overpay the mortgage you have

jlg1

Hi,

Yes theres a lot to weigh up - Ive been told we need a mortgage at 4.84% to make it worthwhile and on top of that our house is only worth £130,000 max in the current market according to local estate agent. Not looking good - "better the devil you know" maybe?

I woudl ideally like a saving of £100 per month but that seems too optimistic - I cant see it to be honest. Maybe in my guitar lessons I should put the prices up instead! LOL