mortgage calculation help please!

littleg_2

hi, I would really appreciate it if those that are good with calculations check to see if I have got my sums right ....

We currently have a mortgage of 86k 4.79% hsbc
Repayments are £999 pm + 200 o/p, which would pay it off in 9.1years
There is 2.1yrs left of a fixed rate.

I'm toying with moving to a 5 year fixed, 2.99%. The early repayment charge would be £1855, mortgage fee £1499. We would add these to the mortgage, therefore borrowing £89500.
I'd like to knock the term down to 8 years The monthly repayments would be £1050+ 150 o/p (same as now) which would take 7.8 years to pay off.

Is my math/logic right - or have I got it wrong somewhere along the line?

Any advice would be appreciated!

Jimbo1976

The maths of switching to a 2.99% rate are just about there. It is costing you almost £3500 to switch but you will save roughly than this in interest payments you will also have your mortgage fixed for 5 years rather than for 2.1

Whilst reducing the term does seem attractive it does limit you in future. There may come a time when you don't have quite so much cash to hand. You could keep the term the same and keep overpaying, that way if you cashflow reduces you stop overpaying. However this is just me being cautious. Reducing the term is a better option for those who lack the discipline to make regular overpayments but you have clearly shown you are committed to overpaying. You won't be saving yourself an extra time or inconvenience as you are still making overpayments each month

getmore4less

That 5y fix is not with HSBC?

£86000 @ 4.79% paying £1199 Sept 2014 £63,550.30
£89500 @ 2.99% paying £1199 Sept 2014 £64,356.42

So you are paying £800 to fix now and secure an extra 3 years at 2.99%.

If a 2.99% rate with fees less than £800 is available in 2 years you are worse off thats the gamble.

Morgage_Confused

Due to the relatively low mortgage amount i think it actually works out a tad cheaper with the fee free 3.49% offer from HSBC.

getmore4less

normaly you cannot change deals and pay the penalty with the same lender you have to move.

littleg_2

didn't realise that gm4l.....I haven't the energy to move provider! I'll give HS&C a ring tomorrow to check. I'm thinking 2.99% is probably as good as its going to get.

Morgage_Confused

its not....as i posted previously its more expensive than the fee free 3.49 but.. hey ho... if you want to pay more.

getmore4less

£86000 @ 4.79% paying £1199 Sept 2014 £63,550.30
£89500 @ 2.99% paying £1199 Sept 2014 £64,356.42

Morgage_Confused wrote: »

Due to the relatively low mortgage amount i think it actually works out a tad cheaper with the fee free 3.49% offer from HSBC.

£1499 less fees

£88000 @ 3.49% paying £1199 Sept 2014 £63,581.86

after 5 years

£89500 @ 2.99% paying £1199 £26,420.94
£88000 @ 3.49% paying £1199 £26,276.67