advice needed on best options

dingle_3

hello,

our situation is as follows.

we are currently in a mortgage with Bristol and West at 6% (1.25% above BOE rate), current mortgage is approx 80K.
We wish to reduce this to 25K (were currenlty selling our other property to release capital) but have to pay 3% on any early repayment monies in early repayment charge if we do so this would equal £1650 - the mortgage comes to an end in Sept 2005.

I've recently had a baby so this would make the repayments way more affordable and less stressful for us both.

We also want to reduce the length of the mortgage from the 23 years left on it to 15 years.

My Q is, bearing in mind we are definatly going to reduce the mortgage one way or the other, are there any better deals out there that we should investigate, seeing as whatever happens theres quite a hefty redemption penalty whether paying off excess of mortgage or getting out of it altogether.

I hope this is clear. Am finding mortgages abit of a minefield!

Many thanks,

Dingle

payless

assuming  peanlty does not extend further than 09/05-
if paying a 3% penalty its unlikely a new deal will recover that amount within the next yr.

Appears similiar situation to the lump sum -
check if there is an amount you can pay off penalty free, then consider is it really worth paying the 3% penalty on any extra overpayment above that amount , depending on your tax situation - if you could get a net saving rate of 3% or more you would appear to be better off waiting until 9/05 to do anything esle with mortgage , and then totally restructure.

If payments are currently morte than you can afford dipping into the savings (or using the interest earned) would assist.