Changing mortgage, should we, and what to?

Costy

Sorry for the cross posting, I originally put this in 'Mortgage free' but it hasn't received any replies, so here might be more appropriate!

We have a mortgage with what used to be Northern Rock at the moment, fixed for 10 years, which finishes next year, no early repayment charge. It's 4.89%, I have no idea if that's APR, or what, or if it makes any difference! It's a flexible mortgage, and we overpay by £100 every month. The mortgage is 24K on repayment, 33,602K on interest only, and 3,224 as a secured loan. We have just under 6 years remaining on the term of the mortgage, and the endowment looks like it'll make the amount without shortfall (endowment was originally for £50k!). The payment is £582.10 a month, and £682.10 with the overpayment.

My question is, in order to be mortgage free quite quickly, should we move our mortgage? The house is worth about £200K. What do you think? We would like to overpay without penalty where possible.

kingstreet

If you're paying 4.89% and you can move penalty-free I'd have been long gone a while ago!

You'll have to decide on the balance between the rate and the need to make overpayments.

If you're credit-worthy, your LTV suggests a rate under 3% - whether tracker or fix.

Look for fee-free options which will cost you nothing to transfer. At your mortgage size, it isn't worth paying a high arrangement fee to get the keenest rate because you don't owe enough to really make it worthwhile.

Costy

Got myself a tracker today with HSBC at 3%, saving £100 a month, which means we can overpay by £200 with no penalties, no entry fees, and no exit fees. Very pleased!

pinkteapot

Nice one Costy - we've got a cheap HSBC tracker too and love the unlimited overpayments. Making hay while the terrible economy and subsequent low interest rates shine.