Which way to go now rates look 'ify'??

İ am looking for a considered answer to my musings!

İ have a 55k mortgage and due to prudence i have saved 28k but hold off paying it into my mortgage because i earn more on it percentage wise--my mortgage is 2pc svr and my savings rate is 4pc less basic tax.
İ cant get a new mortgage for 55k anymore due to circumstances but i could get a remortgage if i reduce it by my savings.--i feel paying in my savings might leave me exposed in these times of uncertainty so i am hesitant.
i just wonder what the tipping point is in looking at becoming mortgage free in view of todays warning on interest rate increases?
mfw'11 No68- 55k mortgage İO--little to nothing saved! i must do better.


  • todays warning IMO doesn't actuall mean anything. It really was only confirmation that rates will not stay at 0.5% forever. There is still the question of when and by how much rates rise. I personally think it will only be .25 every 2 or possibly 3 months with 5% not being seen until 2015.

    I guess the circumstances surrounding your inability to get another 55k mortgage will be a big part of things as is you current deal, are you on a BoE tracker deal?? Have you worked our what your mortgage monthly payment would be with a BoE base rate of 5%? Can you afford that amount? Could you afford that rate if you only had 27k outstanding on your mortgage?? Many lenders have a minimum they would lend would a 27k put you below that??

    My fix rate ends Novermber 2012 and once it does I was hoping lender SVR to still be interesting and worth a punt for a while and then remortgage to an offset deal because our mortgage payment v's income is only about 23% of take home wage after pensions at a 6% fix so I would welcome being able to save/offset or overpay as much as possible at that time. I also have a 'bond' maturing in May 2012 which i will be using for a larger one off payment one fixed rate ended.
    MF aim 10th December 2020 :j:eek:
    MFW 2012 no86 OP 0/2000 :D
  • de1amode1amo Forumite
    3.4K Posts
    İ have actually left the uk and rebuilt my life abroad and just earn an ocupational pension in the uk--İ have businesses and homes abroad but cant link them to anything the banks consider as income for a mortgage.--i have about 75pc ltv with 55k outstanding but the banks are so tight as i am sure you know. my uk income is 7500. İ am in no way stretched and have seen this 55k cost me 230 a month before it went onto the banks svr back in 2007.
    Rate increases will actually improve the exchange rates and i could export my savings into accounts paying 8,5pc less 15pc tax abroad but its a risky call!--its reading how these rates will rise and making the wise choice and time
    mfw'11 No68- 55k mortgage İO--little to nothing saved! i must do better.
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