Mortgage coming to an end, stay with current lender? offset?

k0d

Hello, my 2year fixed mortgage (25year) is coming to an end on march and not sure what to do, this being my firt mortage and first fixed term, I know its little bit of gambling but playing safe is propably better off fixing my mortgage now ...

- my house value is 110k (probably more now as I made major changes to the house)
- my outstanding balance is 78000 (71% ltv)

My current lender (derbyshire) as a 3.99% 2 year fixed mortgage with no fees etc... however if I don't mortage I will be going to their standard vbr which is 2% above bank of englad rate (2.5%).

I have also been thinking on an offset mortgage (firstdirect?) as I have 30K+ of savings.

Whats your opnion? should I go to the standard vbr, remortage or offset it?

Thanks in advance for your advise!

redpete

My amateur's opinion is that interest rates are unlikely to rise sufficiently to make the vbr more expensive than 3.99% fixed over the next 2 years. I'm not sure that you would get much better than 2.5% but it's worth checking - just take any fees into account when calculating the cost over the period you're considering (e.g. 2 years).

So I would leave it on the 2.5% deal and put the 30k+ savings into accounts that return >2.5% after tax.