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Mortgage rates - which one to go with

Hi guys

Your views are much appreciated.

I already have a mortgage (M1) of near 60 k at a fantastic rate. Monthly repayments are about 375 with 15 yrs left.

I need to borrow another 130k (M2) which will be over 25 yrs if M1 is ported. the repayments on M2 will be around 573 for a 2 yr fixed or 624 for a 5 yr fixed making the total monthly repayments for M1+M2 either 950 or 1000.

this means that 60 k will be repaid in 15 yrs and the other 130k will be over 25 yrs. however if I overpay M2 by 200 per month, both M1 & M2 will be paid at the same time.

I have seen a mortgage by Abbey for the whole 190k required over 25 yrs. repayments will be 837 for a 2 yr fixed or 900 for a 5 yr fixed.

for those of you who have the knowledge and have been through something similar, which one would you advise and why?

many thanks in advance.

Comments

  • Thrugelmir
    Thrugelmir Posts: 89,546 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    What's the interest rate on M1?
  • Phantomjoy
    Phantomjoy Posts: 41 Forumite
    53 000 is at 0.23% above base rate and the 7k (home improvements) is 1.49 above base rate
  • Phantomjoy
    Phantomjoy Posts: 41 Forumite
    anybody with any views?
  • anselld
    anselld Posts: 8,649 Forumite
    Part of the Furniture 1,000 Posts Name Dropper
    No-one in their right mind would give up a rate of 0.23% above base, but are you sure you can port and keep this rate? If so keep that and look for the best deal on the 130k.
  • dimbo61
    dimbo61 Posts: 13,727 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    Well over 30% would be on a very good tracker and the other 66% ? Would be fixed which allows 10% overpayments each year ?
    You are taking on a huge mortgage of 3 times your current mortgage debt so I would consider the 5 year fix to protect yourself against interest rates rises.
    Overpay the most expensive debt first if you can afford to.
    Fixed rates have never been this low !!!!
    Good luck with the new home
  • Phantomjoy
    Phantomjoy Posts: 41 Forumite
    Thanks for your replies so far people. keep them coming!
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