advice please

karren

hi can any one please advise me?I am fed up of every month not knowing if the morgage is going to increase, I have a £64,000 morgage with 17 years left on it with the principality, do i go for a fixed rate morgage for 10 years or 5 years or what, i have 2 small children and need financial security for them so have £1,000 in rainy day fund, but am eager to look into overpayments too, and also is it worth shaving few years off the morgage when switching, what would you advise?

herbiesjp

HI Karren

Fixing it is what you need if you need the certainty of knowing your payments each month

What fixed rate to opt for will depend on your plans for teh fuure in some respect - a lot of people view 10 years as a long time to fix for, however if you know you will not sell or move, it could give yu the safety you are looking for

Overpayment options can be a part of the mortgage you look for, and some offer free legal fees and valuations. WHether or not it is a good idea to bring down the mortgage term will depend on your affordability, however in money saving terms it is a good idea as you will not be paying interest on those years you take off the mortgage

MortgageMamma

Hi Karen

You could also consider a capped mortgage, these usually track the bank of england base rate and are guaranteed not to go above a certain rate for a set period of time i.e. 2 3 5 years etc. The advantages of a capped mortgage is if interest rates decrease so do your payments, if interest increase your payments will only increase to a specified level i.e. the cap.

There should be more of these products in my opinion but there are only a handful of them available.