Ditching 10 year fixed

boris411

Hi,
We have 8 years 6 months left on a 10 year fixed ,at 5.59 (over 18 yrs)
and owe 71000 ,property worth 210,000, can over pay by 5 % each year and then incurr a charge of 6%.
We will be in the fortunate position of being able to pay off about 35000 later this year
My question is , should i just pay the charges and move to a cheaper mortgage (first direct). which would be the best way of reducing interest and penalty payments.Any help would be appreciated

VIGILANT22

Whoever advised a 10yr fixed rate mortgage 18 months ago??...not very financially savvy!

opinions4u

VIGILANT22 wrote: »

Whoever advised a 10yr fixed rate mortgage 18 months ago??...not very financially savvy!

I think it will be 2018 before you know whether or not they had their head well and truly screwed on.

Are 10 year fixed rates available at a lower rate anywhere today?

VIGILANT22

I'm meaning the restrictions 1.10yr fixed rate places on someone...life is not as certain as it used to be, you need flexibility...10 yrs is a long time to tie yourself in and the erc's associated with that 2. 18months ago the base rate was dropping...????

[Deleted User]

As suggested above, 5.59% over 10 years may end up being a good deal and a 6% penalty is a big hit to take in the short term. If it were me, I would overpay by the full 5% per year and invest / save the rest. It could turn out that your return on savings in a few years time might be equal or higher than your mortgage rate. As with everything in life though.....

VIGILANT22

I agree it is a big hit...I haven't/wouldn't suggest the OP redeems this..

andrewmp

VIGILANT22 wrote: »

Whoever advised a 10yr fixed rate mortgage 18 months ago??...not very financially savvy!

It suits some people, myself included. Unless you had a crystal ball, there is no way you'd think rates would drop so low 18 months ago.

I remember people thought they might go up quite quickly.

The way I look at it, I'll pay a bit more over the next 10 years for the security of KNOWING what I'll be paying. I wouldn't move to a tracker now if I was offered a free release from my 25 year deal.

andrewmp

VIGILANT22 wrote: »

I18months ago the base rate was dropping...????

I don't think it was actually.

VIGILANT22

[QUOTE=andrewmp;30360983]I don't think it was actually.[/QUOTE]

Well actually, I know it was........rolls eyes

Base rate stared falling in Dec 2007 when it came down to 5.5% from 5.75....Oct 08 it was 4.5% and the following month it was 3%

http://www.bankofengland.co.uk/mfsd/iadb/Repo.asp?Travel=NIxIRx

Dan_1976

At the time taking a 10 year fixed may have been a good call. Only the OP knows his/her situation and it may have and will still suit. In the next 8 years rates will increase and at 5.59% I bet they break even.

18 months ago was a time when predictions were all over the place and nobody could see what would happen next.

Vigilant your starting to sound like Conrad!?

VIGILANT22

Dan_1976 wrote: »

At the time taking a 10 year fixed may have been a good call. Only the OP knows his/her situation and it may have and will still suit. In the next 8 years rates will increase and at 5.59% I bet they break even.

18 months ago was a time when predictions were all over the place and nobody could see what would happen next.

Vigilant your starting to sound like Conrad!?

:T I will take that as a compliment after your post this afternoon....

I know it is down to individual choice...however when rates were dropping to tie in for 10 yrs in my opinion was extreme................