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End of fixed term, what to do now?

Hi,

Our fixed term mortgage is due to end on 31st October. We are currently paying interest only at 5.98%. Ouch!:eek:
We bought our house at the peak time and locked ourselves in with this mortgage, I calculate we have given the bank around fifty grand and not even touched the capital payments.
When this mortgage ends, what should we do?
We owe 167k on the house and can realistically afford £850 - £900 per month.
We went for a fixed mortgage so we knew exactly how much we would have to pay each month but maybe this wasn't the right decision!!
We would love to be able to start paying off some capital but find the whole mortgage thing very difficult to understand. I have a couple of credit cards that will be paid off, one in 18 months and the other in 3 years. I am planning on putting the extra cash into the mortgage repayments. ( currently paying £150 on each card).

Any advice would be useful...... Thanks

Comments

  • cootuk
    cootuk Posts: 878 Forumite
    The mortgage will change to one of their standard variable rates, so you may find a decrease in payments. Any new mortgage company would be very interested in how you are going to pay off the capital if you are currently interest-only, and what equity you currently have will determine what deals are available.
  • Thrugelmir
    Thrugelmir Posts: 89,546 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    Suggest you pay a visit to the Debt Free Wannabe forum.

    Every month you pay no capital off your mortgage. Merely increases the amount you'll need to find over the remaining term of your mortgage.

    Slash your outgoings for a few months and tackle your debts head on.

    With a large mortgage any increase in interest rates will hit you hard.
  • Yorkie1
    Yorkie1 Posts: 11,669 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Combo Breaker
    Why will it take so long to pay off your CC debts? Unless they are on a 0% deal, you will be paying more interest on them than on your mortgage. So pay them off first in preference to putting spare cash on your mortgage.

    Agree with the suggestion to go over to the DFW board. If you post a statement of affairs on there, they can help you find ways to save money.
  • Thanks guys.

    Both credit cards are 0%, but there is quite a bit on them.

    Hopefully the mortgage payments will drop in October but we intend to carry one paying the same amount.

    I have spent quite a bit of time looking around at the other boards and have found a good few ways to save more pennies.....
  • getmore4less
    getmore4less Posts: 46,882 Forumite
    Part of the Furniture 10,000 Posts Name Dropper I've helped Parliament
    edited 4 August 2012 at 8:35AM
    Thanks guys.

    Both credit cards are 0%, but there is quite a bit on them.

    Hopefully the mortgage payments will drop in October but we intend to carry one paying the same amount.

    I have spent quite a bit of time looking around at the other boards and have found a good few ways to save more pennies.....

    what rate does the mortgage go down too

    what rate and when are the CC changing

    overpaying the mortgage with other debts that will be at a higher rate in the future is probably not the correct thing to do if there is any risk they will not get paid off in time.


    £167k @5.98% is £833pm

    £50k/833 is 60 months so say a 5year fixed over 25y with 20 left in Oct.

    £167k repayment over 20 years and over 17years when the CC are paid off.
    rate.....20years......17 years
    0%......£696pm......£819
    1%......£770pm......£891
    2%......£845pm......£967
    3%......£927pm......£1046
    4%......£1012pm....£1130
    5%......£1103pm....£1217

    you say £850-£900now + £150 in 3 years.

    depending on rate this will not be enough so something will need to change.

    have you done the SOA for the DFW(debt free wanabee) board yet?

    What as the original plan to pay off the mortgage?


    Don't fret too much about the 50k so far thats just rent, over the next 20 years @3% there is another £55k interest to pay .


    all numbers obtained using
    http://www.whatsthecost.com/mortgage.aspx

    have a play to get an idea how payments change with rates and term
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