Worth the ERC?

Brallaqueen

Hi All

I've just recevied my mortgage balance sheet, and the ERC has dropped significantly, so wondering if it would be worth paying it to get a better deal?

My maths is awful and interest makes my head spin, could anyone help me?

Mortgage taken with Halifax, Jan 2010 for 3 years at 7.3% interest rate.
35 year term, repayment.
ERC - now £1400
Monthly payment: £450.
Term remaining - 33 yr

Property - £75,000 with deposit of 10%.
Fees added to mortgage £999.
Mortgage remaining = will check, details at home but think 66.5 k
SVR would be BBR + 3%

Myself
One applicant
28 yrs old
Wage - 19200 p.a (net £1,200 per month)

On balance and compared to other posters' situations I am in a good position:
Can meet payments
Have a lodger to share costs
Seems to have more or less held value (1 bed next door sold in Apr 2011 for 70k, mine is two bed)
I love my flat

However there's none of us that can throw money away so no harm in getting some sensible advice...

Thrugelmir

What rate does your mortgage drop onto when the fixed term ends? i.e. SVR.

With the repayment charge as it stands and the fact that you've now a less than a year to run. You'll find it hard to recoup the outlay if you switch to another lender (as there'll be other costs involved as well).

Dropping onto the SVR early may be beneficial. When interest rates are going to rise though is anybody's guess. Lenders may increase rates before the BOE does . Some already are.

Brallaqueen

Thank you Thrugelmir. The SVR would be BBR + 3% so 3.5 at the moment. Have edited post to add

Thrugelmir

Would you pay the ERC or add it to the new mortgage (Not possible if you dropped onto the SVR).

If you can afford would be worth overpaying your mortgage even now. As you won't earn 7%+ on your savings.