17 Months remaining on 5yr fixed - feasable to change deal?

joeyvicks

Hi,

We have 17 months left to run on a 5yr fixed deal. Our rate is 6.5% and i wondered if there could be a possibility of buying out of it somehow and changing lender.
We owe £134k and the house has recently been valued at £145k (what we paid for it). We have an early repayment penalty of £4k.

However, when i look for the best deals you need 10% to get the HSBC 3.74% 2 yr fixed but this has a fee of £1,499.

We only have approx 7.5% equity in the house so is there anyway round it? I have heard in the past of new lenders valuing homes at higher than they are actually to increase the equity?

Any advice would be greatly appreciated

Thrugelmir

How would you fund the early repayment charge and other costs in order to remortgage?

Caz3121

you are going to need £4k for the early redemption plus £4.5k to bring the LTV to 90% plus £1.5k fee so £10k available cash plus any other fees required
How much would you save in your monthly mortgage payment?

kingstreet

£134,00 x 6.5% / 12 x 17 = £12,339

£134,000 x 3.74% / 12 x 17 = £7,099.

The interest difference is £5,240 but you'll pay £5,500 in fees to achieve that.

I'd say the plan is a complete waste of time and money. Even if you did have the equity to do it.

Continue with your current arrangement and see if you can pay a bit more off by overpaying so you owe less in 17 months and can get a better deal then.

_Andy_

"I have heard in the past of new lenders valuing homes at higher than they are actually to increase the equity?" - not going to happen.

joeyvicks

ok pretty unanimous decision there then!!

I'll try to overpay a bit to get the outstanding loan value down a little. Hopefully this will mean that at the end of the 5yr fixed term i owe approx 130k on a house valued at 145k (10%). WIll this enable me to get anything better than our current lender's std variable (currently 3.99%)? Or will i be stuck for options with only 10% equity.