Options at end of current Northern Rock Mortgage deal.......

laurynsausage

My current 2 year 'deal' with Northern Rock @ 4.69% is due to end 31.8.11.

I have been looking at some of the rates currently available and called Northern Rock to find out about their remortgage rates, the following ones were of interest to us based on the following approximations (based 6 months before the end of my deal):

current LTV 70%, outstanding mortgage £175K, house value £250K, 18 year term


2 year Fixed - starting 1/9/2011

Northern Rock 3.10% until 2013
LV 70%
£1044 per month
App fee £0 as i would be already a NR customer
£995 product fee (added to loan)
no valuation fee



3 year Fixed - starting 1/9/2011

Northern Rock 3.68% until 2014
LV 70%
£1095 per month
App fee £0 as i would be already a NR customer
£995 product fee (added to loan)
no valuation fee



5 year Fixed - starting 1/9/2011

Northern Rock 4.25% until 2016
LV 70%
£1147 per month
App fee £0 as i would be already a NR customer
£995 product fee (added to loan)
no valuation fee


As we currently pay £1180.79 per month, by taking 2 year fixed we save approx. £136 per month, 3 year fixed saves approx £87 per month and the 5 year fixed saves us approx £33 per month.


I do have a FA I have used for years and after corresponding with them I am not really any further forward as to:

:question: Should we switch to the 2, 3 or 5 year deal as all are saving me money, I am worried about finding another decent rate after 2 or 3 years - but saving £135/£87 is a lot of money!



Mathematically I am not that great at working these things out and need a bit of assistance before I end up making the wrong decision based on the wrong factors.

Any help is much appreciated.

Many thanks

ACG

Those look like quite good deals.

I was at a mortgage expo a few weeks ago. Whilst nobody knows when interest rates will go up, the heads of various departments at some large banks were saying they expect it to rise to 2% within the next 18 months or so.

There are 2 ways of looking at it really.

First is to hold off for 6 months, take advantage of the lower rate now and then tie in closer to the time. The other one i would consider is to tie in now for 5 years, knowing that interest rates will rise in the long term so at least then you dont have to worry.

Its difficult at the minute as nobody knows when and by how much interest rates will go up by.