Stay on a 10yr fixed or pay the penalty and change??

cannydo

Hi there,

We have a 10yr fixed rate at 5.54%, 7yrs left, £21963 and additional borrowing, 3yr fixed rate at 4.99%, 1yr 2months left, £10310 left. Still got 11 years left with both.

We have decided we want to start overpaying and eventually get rid of the mortgage, I phoned the skipton, and they have set our direct debits so that we pay up to the 10% allowance without incurring charges. This would mean we would pay the mortgage of in 5/6 yrs.

We used to pay £206 on the 10yr fixed, now we are set to pay £434
and we used to pay £94 on the 3yr fixed and now set to pay £186, basically our payments were £300 now going to be £620.

At this time I know the standard variable rate is low, and that there are many good deals out there, I was wondering if it would be worth paying the penalty to change to another deal or switch to something else.

The penalty would be £878 (4%) on the 10yr fixed and £309 (3%) on the 3yr fixed.

Does anyone have any advice on whether I should do something, or just run with it. I am a not sure whats the best thing to do.

Thrugelmir

As the mortgage balance reduces then any potential benefit from remortgaging diminishes. Particularly with an ERC to pay along with the disproportionate product fees to secure a new deal.

Skipton's SVR is currently 4.95% so not low in comparison to your current mortgage products.

As you suggest maybe wait until the first fixed term ends. Then reassess the situation.