Advice on Remortgaging - slightly different question to all the others

Ronaldo_Mconaldo

We took out a £118k mortage on a property we paid £148k for in May 2008 - pretty much the absolute peak of the boom, just our luck. Anyway it was fixed for 5 years at 5.83% but spread over 30 years. I'd always wanted the ability to overpay if we could and was quite cautious when we took out the mortgage but it turns out we've been able to pretty much throw money at it in the shape of overpayments - £500 a month here and there in the first couple of years but £500 a month since January last year to at least next month and hopefully until the end of the fixed term.

My questions then: If I renew the mortgage (we'd need about £80k-85k) and took out a fixed rate deal for another 5 years then I would eventually approach the 10% overpayment problem if we go at the same kind of rate as we have. Is this correct? So what do people do who think that they might be able to make 10% overpayments in the calendar year? Would it be best to go with 2 years fixed and then SVR or maybe no fix and straight to the SVR?

We're with Santander btw and ideally would like to stay with them to save on the complications of changing to another bank. Anyone got any suggestions or can anyone see any big problems with the plan? The SVR is 4.74% at the moment which has just increased and people complained but I would love to be on that rate compared to what we're stuck with.

latecomer

Check out the calculator here:

http://www.moneysavingexpert.com/mortgages/savings-vs-mortgage-calculator

If you have a low LTV and good credit rating you could get a new 5 year fixed at 3.x% . you can overpay most mortgages by 10% a year before being penalised and hence you could do that and then put any excess into an ISA or another savings account (regular saver for better interest rates on a monthly deposit amount)

This is pretty much exactly what we are going to do BTW

JimmyTheWig

Ronaldo_Mconaldo wrote: »

So what do people do who think that they might be able to make 10% overpayments in the calendar year? Would it be best to go with 2 years fixed and then SVR or maybe no fix and straight to the SVR?

So at the point in time we are talking about you will be 5 years into a 30 year mortgage. So you will have 25 years left on your mortgage.
But you don't have to keep to that term, as long as they think you can afford it. You can reduce the term.
So decide what the minimum you want to pay each month and set your term to match this repayment.
You can then still make up to 10% overpayments on this if you want and are able to.