to fix or not to fix

haras_nosirrah · 29 October 2011 at 3:02PM

I have £20k on one part of the mortgage that is about to go onto nationwide variable at 3.99%

They are offering a 2 year fix at 3.19% with no fee and £300 cashback

Am trying to clear this bit of the mortgage in 2 years (currently at 7 years and overpaying £500 a month) so am wondering whether to fix this bit and set at a term of 2 years or to go onto variable and have the freedom to repay as much as I want rather than the £500 a month maximum.

Any thoughts?

Sepa74 · 29 October 2011 at 6:19PM

Hi, I would see if they would shorten the mortgage term to 2 years. This would require you to pay slightly more than you are paying now, but it would get rid of it in your 2 year time frame.

Alternatively, if you want a bit of flexibility to not overpay every single month for the next two years, ask them to shorten it to 3 or 5 years. This will increase the monthly repayment, so your repayment allowance lets you go repay more in total when you want to.

Does that make sense?