Can i do this? What would you do?

Spangled

Couple of observations from a non-expert...

You currently have base rate trackers on both parts of your mortgage - so I'm a little curious as to why you'd want to fix one half of it? Esp as a three-year 2.68% fix only saves you around £60 a month against your current 4.24% (ie it's not like you're saving hundreds a month by fixing).

Surely taking on a fixed rate would constrain your future options?? The two BR trackers you have give you excellent flexibility (unlimited overpayments, ability to switch deals with no early repayment charges etc). I could understand fixing if you wanted to fix the *whole* of the mortgage (for peace-of-mind reasons etc) but not just one half of it. Just IMO.

I'd also wager rates will be higher in three years' time, just when a three-year fix would be coming to an end. You'd face remortgaging that part on a higher rate, with possibly more fees.

Part 2 of your current deal (BR + 0.75%) is bloomin' fantastic and you have the slightly larger half of your mortgage on that. I'd be tempted to keep that if at all possible.

Sure, the margin on Part 1 of your current deal (BR + 3.74%) is on the high side. But you could either a) overpay now like crazy on Part 1 (if possible), thereby minimising the impact of future interest rate rises or b) see if you can get a better tracker/variable rate on it with no tie-ins.

On the mortgage as a whole you're currently paying a combined interest rate of less than 3% (back-of-an-envelope calculation) - which is pretty good even by today's low-rate standards.

One other option: HSBC's lifetime tracker of BR+1.49% (max LTV 60%). Remortgage everything onto that rate! I'd move to that myself if I wasn't tied in to a fixed rate.

But like Kingstreet and Holly Hobby say, give A&L/Santander a call and see what they can offer.

Good luck.

Ivrytwr3

Ty for that detailed reply.

Yes, Part 2 is an excellent rate which is why i thought it would be best to keep that, but get a better rate for Part 1, which is like you say, on the high side.

As for saving 'only' £60 per month if i switched, surely any saving is better, i could even throw the extra £60 at overpayments?

HSBC - i bank with HSBC, so even looking at both of interest rates you think it would be better to move the lot to this mortgage? What about the inevitable interest rate rise looming?!

Spangled

Ivrytwr3 wrote: »

Ty for that detailed reply.

Yes, Part 2 is an excellent rate which is why i thought it would be best to keep that, but get a better rate for Part 1, which is like you say, on the high side.

As for saving 'only' £60 per month if i switched, surely any saving is better, i could even throw the extra £60 at overpayments?

HSBC - i bank with HSBC, so even looking at both of interest rates you think it would be better to move the lot to this mortgage? What about the inevitable interest rate rise looming?!

Well, you'd need to crunch the numbers yourself to see if you can handle any interest rate rises. You have a total outstanding liability of £145k and you can play with some numbers here:

http://www.bbc.co.uk/homes/property/mortgagecalculator.shtml

to see the implications of moving everything to one deal or keeping the mortgage split like it is currently.

I do agree with you that rates WILL rise - just not sure when or by how much! (crystal balls etc)

With your current set-up, you're on the equivalent of the whole lot being on a BoE +2.1% tracker (approx). Move both parts to one BoE +1.49% tracker and you'll benefit immediately.

Choices, choices!