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Remortgage Advice

We will move into the final year of our fixed mortgage in September and the penalty is down to 1% of mortgage so approx 2K.

I currently have a 210k mortgage paying £1460 a month. I 'm looking to remortgage asap but need advice on whether to fix my mortgage or possibly move to an offset.

Property is valued at approx £290-300k and we have savings of £15k with an extra £1k per month being saved. I would also like to overpay the mortgage so leave it around the £1500 mark per month, mortgage would also need to be portable as possibility of moving in next couple of years.

Thanks in advance for any help.

Comments

  • Jimbo1976
    Jimbo1976 Posts: 498 Forumite
    We really need to know what interest rate you are paying before you can get any meaningful advice. It may be that you are better off staying with your existing lender. Most mortgages allow you to overpay by about 10% of your balance per year, though Nationwide restrict you to £500pm

    At first glance I suspect that an offset mortgage is not going to be good value for you based on the size of your savings compared with the mortgage.

    Pretty much all new mortgages are portable as long as you fit with the lenders criteria at the time you decide to move
  • Thanks Jimbo1976

    Interest rate on current mortgage is 6.29% (C&G) - high as at that time i had another property that was in negative equity as well as my current property so couldn't change mortgage companies.

    Main reason for the thought behind the offset is due to the amount we are able to save monthly at present and also wanting to pay off the mortgage asap but any other suggestions would be appreciated.
  • Jimbo1976
    Jimbo1976 Posts: 498 Forumite
    Wow that is high. You seem to be about 75% LTV so there are plenty of rates below than even taking into account the ERC.

    You don't need an offset to overpay. The main problem with offset is that for all the flexibility you get, you pay a higher rate. As a rough rule of thumb if you have about 25% of the value of your mortgage as savings then offset looks good.

    Most lenders allow 10% paydown per year, so that allows you to pay off an extra £1,750 per month. Are you likely to need that money back? if so then thats another plus for offset. If you don't then you can still overpay
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