Leave mortgage? Please advise...

dizzyscot

Husband and I bought our first property in June 2009, which at the time was valued at £195k, and the mortgage was for £135k (66% of property value). We have a mortgage with the Scottish Building Society which is fixed for 5 years at 4.89% over 25 years. I wanted the long-term fixed rate as I suspected that interest rates would rise after the election, but perhaps this does not seem the case now, and I was wondering whether it may be wise to ditch the mortgage for a lower rate. There is a 3% early repayment charge though. I have just learned that despite paying over £12k since last June, we have only knocked £2k off the original £135k - yikes!!! This has spurred me on to try to find out if I could get a better deal, and I also plan to start making regular overpayments of at least £200pcm (monthly mortgage payments are currently £783). Any advice would be greatly appreciated.:o

chezmck

Try the mortgage calculator in the Mortgages/Homes section of the site. It was having a little play on that a couple of days ago that has convinced me to pay out early exit fees and swap to a new deal. I'm still pounds better off with the exit fees and will be in a position to over pay ( by leaving the payments at the same level as I've paid for 4 years) and knock 8 years of my term.

dizzyscot

Thanks for your reply. I have actually just found this calculator myself, and it looks like I might be better sticking with what I have. I'm not sure if I would like the uncertainty of a tracker, and the fixed rate deals aren't low enough to justify paying the ERC. I'll keep checking rates in case anything changes.:)

dimbo61

The very best 5 year fixed deals are 3.69% and 3.95% with fees!!!so your current deal is not bad at all.
If you can overpay every penny you have spare ( check any overpayment limits ? 10% ? )
Security of a long term fix is not a bad idea in todays uncertain times

firstaspect

That's not a bad rate. We're just buying a new fixed rate mortgage at 4.69% and very happy to have the security of a fix at a reasonable rate.