These figures confuse me, what about you?

carl310166

Hi,
I am looking for help in deciding what to do with our current mortgage, i rang the Chelsea B.S this morning to get the figures, but i don't know enough about the mortgage market to know what the best course of action is, if i post our current deal, can someone advise if it is worth changing NOW as we are tied in until Dec 2008.

Lender Chelsea B.S
Balance £72000
Redemption £2200
Tied until Dec 2008
Int rate 7.25 but 7.49 from June
Term left 14y 8m
Overpayments possible 20% of monthly repayemnt, approx £130
Monthly repayments £650 ish but going up in June

We have spare money each month to overpay the 20% if we took this option, in fact, we have the resources pay up to £500 extra.

The question is, do we carry on as we are until Dec 2008 then go elsewhere without paying the redemption fee?

Or do we overpay the 20% that is possible without penalty, then leave in Dec 2008?

Or do we cut our losses and leave now, get a new flexable mortgage with ING paying less interest from day one, overpaying each month, but taking a hit on the redemption fee?

My feeling is that it would make sense to move now, but i don't know how to work out the true sums, can anybody help us?

Thanks in advance.

CLAPTON

a redemption penalty of 2,200 on 72K over 19 months is equivalent of
about 1.93% interest rate

so if you can get a deal at an interest rate of less than 1.93% then at least its worth looking further... however, you would need to factor in any other fees applicable to a new mortgage.

carl310166

CLAPTON wrote: »

a redemption penalty of 2,200 on 72K over 19 months is equivalent of
about 1.93% interest rate

so if you can get a deal at an interest rate of less than 1.93% then at least its worth looking further... however, you would need to factor in any other fees applicable to a new mortgage.

The ING Mortgage is 5.8 apr (don't know if this is going up), and ours will be 7.5 ( don't know if this is the apr), so it's not quite the 2% difference, but we would be overpaying from day one on a new mortgage, so i thought we would be saving a lot of interest in the long run?

CLAPTON

i guess its pretty important to find if the ING mortgage is going up and also you haven't mentioned any remortgage costs....

dont worry about the long run .. you only need to compare the costs up to dec 2008 as you will be able to remortgage then without penalties.