Remortgage or not?

1jim

Hi everyone

My fixed rate is about to come to an end, currently on 5.35% which will revert to a svr of 2.5%

I am tempted by the 3.9% 10 year fixed by N&P.

I know by going for N&P deal I will be paying more now than if I stay on svr but wonder if I will be better off in the long term, I know no be has a crystal ball (I mean who would have predicted a 0.5% base rate?) but wonder if anyone has any thoughts on this

We currently owe around £77000 and have 15yrs 5mths left to run on mortgage, house worth £150000+

Any thoughts would be welcome
Cheers

Thrugelmir

One option is to drop onto 2.5% rate and overpay.

The less you owe, the less interest you pay and the quicker the capital balance reduces.

mark55man

you have to work out how much more you would pay in the short term and whether rates would ever go up enough to make it worse. you also need to work out exactly how much this "insurance" you are effectively paying is costing you - it may be up to 10% of the value of the house

also you would probably do better to go low for a bit and then maybe fix later. hsbc habe a base rate + 1.89 which I think you could get. so you could either overpay now or save the difference to use later

i did a 10 year fix because I was very worried about inflation pushing rates up - I go the inflation right, just nobody did anything about it, and now to some extent that worry is gone away. i am looking at £2k a year extra payments which is not the worst thing but you have to be aware how much your decision might cost you

you could well do better going for a short term maximum discount and look again in 12 months