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remortgage - considering part repayment
shorthdt
Posts: 4 Newbie
Just remortgaging our IO mortgage with our lender @ 3.3% for 5 yrs.Mortagage has 8 yrs to run. This saves us £50/m.
The endowment shortfall means needing to save @ £200/m.
They are offering to split this as part repayment.
Are part repayment remortgages generally a good way of addressing anendowment shortfall, or not ?
Taking this rate and splitting the mortgage, taking a £15K repayment wouldreduce the redemption figure from £75k to £60k. With the new deal this would be£100/m more than we currently pay. Seemingly it’s a no brainer but am I missinghidden costs ?
Been trying to number crunch this but can’t make sense of it all.
Will the interest paid on the 15k repayment offset the benefits of reducingthe redemption figure? Would paying£200/m into some saving scheme be a better option ? How much do we need toconsider how different the financial landscape might be in 5 yrs ?
Any help appreciated.
Thx
0
Comments
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Either convert part of the mortgage to repayment, or run a separate savings plan, such as an ISA, to cover the shortfall. Your choice.I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.0
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