Yet more Ditch or Fix advice please !!

Johnny99

I'd really appreciate some advice as I've been trying to work this out for myself and it's just getting more and more confusing !
I'm currently in a five year fix at 5.79% which ends in July 2012 - £96,000 outstanding however if I ditch the fix it will cost me 3% of the outstanding balance in exit fees.
I've been looking at a tracker at 1.79% above the Bank of England Rate for life which will cost me around £100 per month less, however although the "ditch or fix" calculator suggest that anything under 4.09% would work out cheaper I'm concerned as I'd be increasing the outstanding balance to include the exit fee.
I know interest rates are expected to rise and it could possibly come to the situation where I might be paying 5.79% or more on the tracker !! I'm very tempted to just stay where I am for the next 18 months but could really use some advice .
Thanks.

TBeckett100

if i was looking for a mortgage now, i would look at a 5-10 year fix. In 2 years, i expect rates to be a bit higher than now, maybe instead of going for a temporary bargain, think long term!

mlz1413

Remember 3% is just your exit fees, what are the new product fees?
Some companies are charging £1999 arrangement fees or a %, add on the survey needed and you could need to save many months of £100 to recoupe the fees alone.

I agree to think long term too. Do you intend to move or is this your home for the foreseeable future? If you intend to move I would stick with this mortgage and pay the fees for the next house.

Johnny99

Thanks very much for your help - I don't intend to move house in the next five years or so, this would be a remortgage if I go for it.
My thoughts were that if I went for the lower rate then more of my payments would be going towards paying off the debt rather than interest - there are no legal fees and a free valuation plus only £99 application fee so it's only the ERC I'm concerned about !

dimbo61

HSBC have a sale on at the moment so no £99 application fee BUT the phones lines are very busy and they only take the best applications with the best credit score and LTV less than 60% with there valuation!
If you are only going to save £100 a month and pay at least £3000 ERC plus exit fee ??? are you better off just overpaying your existing mortgage?

hastie

If you are only going to save £100 a month and pay at least £3000 ERC plus exit fee ??? are you better off just overpaying your existing mortgage?

Totally agree with this advice, do your time with your current lender then see what is about. I would be wary of the current tracker rates at the moment, they are a gamble.