Remortgage advice

cmonwigan

Evening all,

I'm looking for some advice on remortgaging as our financial position has changed:

Current situation:
20 year mortgage in 2008.
5 years into a 10 years fixed rate of 5%
£145,000 left to pay.
Redemption fee of £5k - (this will only decrease by £1k over the course of each of the next 5 years)
Only one-off yearly overpayments are allowed - no more than 10% of the balance.
House currently valued at £200k
Current savings £10k

We can now afford to make overpayments of £250 per month, as my wife has now found what would appear to be secure work as a special needs teaching assistant.

My current provider - Leeds Building Society - provide an offset re-mortgage product, with a rate of 3.29%. I'm thinking of asking to be moved to that product. I will of course try to persuade them not to charge me the redemption fees...you never know.

Am I making a big mistake? Is there a better way to get mortgage free quicker. Should I stay on the existing product and invest the £250?

I look forward to any replies and thanks for reading...

Thrugelmir

No chance of being released from the ERC.

After 2 years the product you are suggesting returns to the SVR of 5.69%.

Personally I would save as much as possible into an ISA every year. Then make a lump sum repayment.

ValHaller

If you save the £250/month, you have £3000/year you can put to the mortgage which is well within the 10%. And you could put the whole £10k on top of that and still not have a penalty.

I suggest that the improvement in circumstances is not of itself enough to prompt a change of mortgage.