Coming to the end of our current arrangement

ashymark

Hi all,

We are coming up 3 years into our 25 year mortgage term. Our current mortgage is a 5.99% 3 year fixed with Santander.

The figures

Current house value - £85000
Remaining mortgage at end of fixed period - £68000 (there or thereabouts)

I'm caught in two minds over our next product at the moment, I have saw that HSBC have a 10 year fixed at 5.29%, so it is a slightly lower rate than our current and it has the security of 10 years where I would be utterly amazed if rates don't go back up in the next 10 years.

Caught in the other part of my mind is the option of going with a different lender and going for another 3 or a 5 year fixed, rate is much lower so potential for overpaying is much higher but there is the chance that at the end of 3 or 5 year period, rates are higher than the 5.29 on offer for the 10 year fixed.

We are looking at zero fee arrangements only purely as we have recently spent 3k on a new bathroom and are in the middle of building up our emergency pot again and don't want to use it for a mortgage application fee unless the difference was going to be huge in terms of rates available.. Put in the same position, what would you do? Go for the 10 year fixed or a different fixed for a shorter length of time.

dotdash79

If you could do a 3 year fix at 2.7%, then another one at 3.7% and then a another at 5% and a final 3 year fix at 6% that would give you an average fix over the 12 years at 4.35%

Is that difference enough for you?

Don't forget you LTV will be coming down as you pay off and at the end of every fix you can pay a chunk off before getting a new mortgage so might be able to get better deals.

Saying that you would know what would be paying for the next 10 years. Can this allow overpayment?

amnblog

Why would you go for a 10 year rate that is priced at more than 1% above the market leader? - to save a £999 fee?

If I advised you to pay over £6,000 extra interest to save a £999 fee I would be shot.