Stick or twist - mortgage dilemma.

chaucer

I would appreciate some guiance and advice.
I currently have my house on the market. I actually had a buyer and a property to buy but both deals fell through at the last moment.
The mortgage offer I was goiing to buy with expires in a few weeks. My existing mortgage discount period also expires very soon. I may want a new mortgage if I can find a buyer and a house to buy but do not know when that will happen.
My existing lender has offered three options.

1] Do nothing. My rate will revert to standard variable rate @ 7.32 with repayments @ £488/month.

2] Move to a new discount rate (1.9% off svr) for a two year period. This has a rate of 5.39% and repayments @ 432.54/month. It has a penalty of 3% = £1601.93.

3] Move to a new tracker rate (0.9% above base rate) for a two year period. This has a rate of 5.34% and repayments @ 431.12/month. It has a penalty of 1% = £533.97.

Both these new rates are fees free (apart from £60 admin charge) and both can be ported to new products with the same lender should I need to remortgage.
However, lender's rates are not competetive so would probably look to pay penalty fees.

Many thanks for any help.

cattie

If you are thinking of moving sometime this year then if I were you I'd pay the svr on the existing mortgage & look for a new mortgage when you are ready to buy another house.