REPAYMENT MORTGAGE GOES UP - even though interest rate goes down???

Bodie1

Hello
This may seem odd but i cannot get my head around this - I have an outstanding mortgage of £57k and my current fixed rate expires in June (5.09%)
If I do nothing - i go to 2.5% base rate but my monthly payment barely decreases - I was expecting a much lower monthly repayment figure due to over 2.5% benefit on the new rate

What am i missinh here???:(

Ditch_Crawler

Has your repayment gone UP, as per your thread title, or has it gone down a bit, as per the content of your post?

In the early years of any mortgage, the repayments only just cover the interest, and so your total debt has not reduced by very much at all. So a large change in interest rate means only a small change in monthly instalment.

D.

dunstonh

Are you sure you are going down to 2.5% base rate and not moving to a tracker rate or standard variable rate?

getmore4less

Significant part of the payment is capital.

£57k interest only is £242pm @ 5.09% £119pm @ 2.5% £123 difference

Repayment over 20y £379pm @ 5.09% £302pm @ 2.5% £77 difference.
Repayment over 10y £607pm @ 5.09% £538pm @ 2.5% £69 difference.
Repayment over 5y £1078pm @ 5.09% £1012pm @ 2.5% £66 difference.

Shorter the term the smaller the difference.

_Andy_

Is it and was it capital repayment?