Which path to choose...

Mashmallow

Hi all.

I'm posting here for a little bit of advice.

ATM I have a staff mortgage rate of 0.5% on approx £36k and the remainding £38k on 1.19 above base. It's a totally flexible mortgage...no penalties etc and I can overpay as much ask like. I can also borrow up to a max of £140k on this mortgage should I ever need to move etc.

My house is sold and I have the predicament of whether to transfer my mortgage to my new property, or take out a totally new mortgage.

My new house is valued at £110k, and it will cost me £1k to take my existing deal across. If I was to take a new rate, I can still take £36k at 0.5% staff, but the rest would be on a new fixed rate (2.73 fixed for 2years). A new rate would incur no fees.

I am not looking to stay in the new house for longer than 2 years max....so if I was to move and keep my existing rate, I'd be looking at another £1k solicitors fees to transfer it again.

Is it worth paying £2k in 2 years to keep 1.19 above base on £38k?

I might travel in 2 years as well....that is an option ATM, so instead of moving, I'd rent my house out.

Any advice on what to do would be greaty appreciated xxx

Mashmallow

Anybody?

I would just like to know if its worth paying £2k to keep the 1.19 above base?

I am moving to a small cottage, then moving again to hopefully, my forever home.

Thank you everyone xx

ValHaller

Mashmallow wrote: »

I would just like to know if its worth paying £2k to keep the 1.19 above base?

2000 on 38000 over 2 years is 2.5%/year. So your base + 1.19% deal will cost you 4.2%/year.

Mashmallow

Thank you for your reply. Please excuse my ignorance, but can you explain it a little further.

Also, if I was to keep my rate of 1.19 above base for the next 20 years, would it be worth paying the £2k?

Thank you very much for taking the time to reply xx

ValHaller

Ah! for 2k you get your rate reserved for 20 years. 2000 on 38000 over 20 years is 0.26%. so your base plus 1.19% will cost effectively 1.45% over base