Best type of Mortgage for around 180K

Daniel_B

Hello all,
I currently am very lucky to have a small mortgage 60K, and a large offset.

However, due to a requirement to mvoe for work, my mortgage balance is likely to go up to around £180,000, and savings will dwindle to £15,000, so an offset is clearly not an option.

My plan is to not save any money for the first 3 years or so, and rely on our 15K cushion, that will be sat in a high interest account somewhere.

Does anyone know if you are able to overpay the fixed rate mortgages?
Repayments would be around £1100, but I would be hoping to pay back about £1450 per month, as I know overpayments earlier on make the biggest difference.

Are their any recommendations of good providers, or good lengths of time to fix it for, ie 2 years seems to be very common, but maybe 5 would be better?

Thanks in advance

Dan

hi123

hi dan
i am sure there are a lot of lenders who will allow extra repayment for about 10% per annum
i am currently with halifax fixed and they allow 10% repayment annually
hope it helps

Daniel_B

Thanks for that - looking on some sites, look like if you fix for 3 years, you can generally overpay BY 10% of the loan amount over those 3 years, ie 180K, would enable 6K overpayment per year over 3 years.

Can I ask why you chose fixed as opposed to discount - just seemed better value to you?

Dan

MortgageMamma

Hi Daniel

How long you wish to fix for is heavily dependent upon your feeling about rates at present and attitude to your future financial planning. how long to you see yourself staying in your new property? will you be in a position in future to pay off any large lump sums on your mortgage? Is there any reason your income could increase or decrease over the five years or so? If so - why when and by how much?

Thinking about these things will give you a better insight as to whether you would be suited to a short (2 yr) or medium (3-5 yr) term fixed rate.

As for overpayments, would you be happy to stick to the 10% overpayment per annum or do you require a product which facilitates unlimited overpayments without early repayment charges being triggered? Do you require the facility to borrow back the overpayments in future or perhaps take a payment break from your mortgage using the overpayments built up? Would you like the ability to underpay your mortgage? Bear in mind that the % of deposit you put down as opposed to the % of borrowing (known as a loan to value) generally has a big impact on the products available to you and how you will be assessed for these affordability wise.

These things need considering when selecting a product. If you have not already instructed a whole of market mortgage broker to help you out I would suggest you would benefit enormously from professional advice.

MM