anyone good with numbers!!??

corinne14470

Hi can anyone help please.

I have a 95k mortgage on a 6% 'deal. 23 yrs left.

£475 now only paying interest only.

Trapped in till Nov 2013 with presently 4k approx to get out.

Been offered a mortgage with most expenses paid for 3 yrs fixed term at £535 pcm about fixed rate 2.5%, repayment over same term BUT my dilemma is what happens if I was to pay the difference each month of £60 to my present provider and keep it interest free instead of paying £4k to them for 'nothing' and leave when it is fee free.

Anybody know what difference it would make as I have no idea where to start and not sure if those details will help!

I hope you can guide me as things are that tight :-) I would be looking at different deals in 3 years also so really it is seeing if it is worth getting out over this short term and there are too many figures for me to even start!

Pretty please

hcb42

If you move to a 95K repayment mortgage paying 535 a month, then by 2-2.5 yrs time you will have reduced your mortgage outstanding by about £5-6K , but it will have cost you the £4K.

If you do what you say and overpay by £60 a month, then you will have made abuot £1800 in overpayments in a period of approx 30 months. Technically, if you have the £4K, then there isnt a lot in it.

can you not stick with the original rate and overpay more to start eating into the debt? At 6% on a 25 year term repayment, the payment would be over £600.

Does the £4K reduce over time? E.g what happens in Nov 2011? Is it still £4K ERC or does it reduce?

corinne14470

Hi thank you for your knowledge!

Additional factors the £95k is excluding the 4k exit charge and the ERC reduces in nov 11 to 3% of the balance - it becomes about £3k.

I knew there wouldn't be much in it but I defintitely don't want it to cost me more to move!!

Also, I have a loan out £10k over ten yrs 7% fixed - iI beieve it was a good tesco one , they sent me a statement recently in which they have already added the total which was scary as it became £15k ish. Is this worth adding to a mortgage as we pay our £121 pcm for this and 9 yrs left.

Thank you kindly in anticipation.