Can I ask your opinions please- fixed mortgage and policies backing up

GAILEY

Hi, I hope that you can give me your opinions/gut reactions on my position please - I'm not sure yet whether there is any point in booking a meeting with a FA...if I can give you a brief resume of my situation -
Myself and OH bought a property in 2000, with a Northern Rock repayment mortgage - as time went on we were advised that interest rates were on the up (as they indeed were) and to try to get as long a fix as we could while the rates were affordable - and we got a 4.99% 10 year fix with Britannia in 2005- which, to be honest, isn't a bad deal. As time has gone on and we've had the money we have overpaid the maximum monthly amount that we can (499) on top of the £530 without penalty - early repayment brings a penalty (currently 5% of reypayment amount..going down gradually as the fix nears the end.As things stand, using the MSE calculator, if we carry on overpaying the mortgage (which stands at about 33,500 at the moment) will be finished in Spring 2014.
BUT.....I can't help wondering if I could get a better deal by ditching and switching, in the light of the current climate and predicted low rates for at least a couple of years...and if I did that I could put what I have in ISA's (currently earning sod all) to reduce the debt too....but I think I would have to achieve a rate of less than 3.75% to make it worthwhile....are there any of those deals out there at present? - House would, on a very conservative estimate, be worth about £230,000 - so it would be a decent loan to value figure - especially if I could shave more off with the ISA's
AND..and this is really an unknown for me...whatever I do with the actual mortgage - I am currently paying about £150 a month for backup policies - one of which is a sickness/critial illness one which is £98 a month...and on death/critical illness (and you really have to be half dead to claim) it only pays the amount outstanding on the mortgage at the time of claim....which is of reducing value...especially since our overpayment is reducing the capital further. The other one is an employment protection one - and I am really unsure whether they would pay out for me anyway (as I am a company director and on the books at a minimum wage, even if they paid out they might take that into account)...
..
sorry this is longwinded - I suppose I want reactions as to whether there is merit in going to see someone to see if I can gig things better, or whether I am wasting my time. If you think its worthwhile seeing someone - should I opt for an adviisor that charges a fee and receives no commission??

holly_hobby

Your current mge deal ends in 2015 - what are the early redemption penalties on this - as you shall have to factor this into the overall savings you make on another product (as its cost you to get out of your current product).

Although interest rates were held fast here by the BOE, they have increased in Europe - which could be a sign of things to come our way , if the BOE feel pressured enough to fall in line with are European friends, and to also address the over target inflation fig we currently have.

Current GDP figs have been released as 0.1% - so the recovery isn't going well by anyones stretch - and I would doubt we would move BOE before the end of the year, maybe even keeping things as they are into 2nd qtr of next year - but NO ONE can know for sure how the BOE will play things ... we can only give a good (and well meaning) guesstimate .. !!

You are on a fixed now, would you want to fix again ?

Or take a punt on a tracker deal (penalty free so you could move when/if BOE start to inc base) at which point you may feel you want the security of a fixed rate again (although if BOE base rises, so will naturally the cost of fixed money).

You should be able to get a fee free remortgage on the high st -and will enjoy the lowest rates if you have a low LTV (certainly under 75%), of course any lender move will involve satisfying lender status and income checks.

I am not currently involved in the placement of mges, so don't currently have access to mortgage brain or the like, one of the active advisers should be able to give you a heads up on current best deals.

What you do need to take account of in any interest rate savings, is the amount of penalty fee you will have to pay your existing lender - with 5 yrs to go I would imagine its still pretty hefty - so check out your paperwork - to see if a move inc fees will still save you money over the long term.

Hope this helps get the ball rolling ... others will be along to add further info and comment...

Holly

GAILEY

Thanks Holly