Poss to take advantage of super-low rate?

danthemoneysavingman

Hi
sure I'm not the only one who's thought about this...

I recently took a 5-yr fix @2.99, but am wondering if it would be possible to take advantage of the current much lower rates in any way to help effectively reduce my mortgage rate.

All thoughts welcome, hopefully it's not just a dead-end idea.

I have over 55% equity if thats relevant?

Thanks

kingstreet

Yes. Remortgage to a new lender.

If the rate is good enough, the savings you will make will repay the early repayment penalty you'll face to repay your current mortgage early.

As the best five year fix at the moment is about 2.6%, I don't see you saving a lot though.

michaels

Rule of thumb calc, say your new rate for 5 years is 0.5% less but your erp is 3% effectively you gain 2.5% interest saving (0.5% x 5 years) but it costs you 3% to get out of your deal so a net loss.

amnblog

Why did you take a five year fix what has changed if you are regretting it already?

ghosti

i think 5yr fixed at 2.99 is pretty good.

you would also need to factor in other charges - admin fee on these low interest deals, solicitors for the remortgage, valuation fees for the new lender etc.

is suspect it will cost you more than what you save too

danthemoneysavingman

Hi all, thanks for the replies. Iwas thinking maybe would a second charge mortgage be possible, or to get a mort-free relative to take a small mort which I would then pay them back - but i guess the maths doesn't really add up.

I'm happy enough with my current deal, but 1.69 is ridiculously low so was hoping someone may be able to think round this one.

Thanks again!

kingstreet

Nah. A second charge would be 10%+ and the other thing relies on a third party securing your debt on their home and income to save you money at their risk.

Would you?