Thoughts on remortgage v overpayments

1jim

Hi everyone, would appreciate your thoughts on this

Currently owe £68000 via repayment mortgage with 13yrs and a few months left to run.

Currently on svr with c&g at 2%over bank England base rate! it appears they can't raise this at will like they and others have done with other svr's. So paying 2.5% at the minute. Can move penalty free anytime I like

Thinking about the N&P 10 year fix at 3.84% rough calculations this would mean paying about £60 a month more than on the current svr however if interest rates rise this will obviously be reduced.

The alternative is to overpay by the same £60 which would reduce payment term by about 1 year 7 months but this would obviously not be the case if interest rates increase.

So any thoughts on this, am if mad thinking about paying more by moving to this deal?

ethank

I think this is your own gamble to make. Will interest rates go up. Some think it will be years, some think that the potential of a bubble caused by Help to Buy means they will.

You need to decide whether having the comfort of a fixed rate for 10 years outweighs the benefit of your current deal.

Wh05apk

No easy answer, but personally given the relatively small size of the mortgage and short term I would stay where you are, and either overpay, or build a savings pot up elsewhere, which could then be used to cushion the blow of any increase.

Thrugelmir

Given the size of your mortgage my choice would be to overpay. Not just by the £60, but also by what you can comfortably afford. Make the most of low interest rates while they last. The capital debt only has to be repaid once.

N&P's follow on SVR is 4.99%. So after 10 years you could well be paying more than 2% above base.

1jim

Thanks guys. Overpaying it is then, will start at the £60 a month that the remortgage would have been, will add to this £100 a month in a few mths when my little used gym membership is cancelled :-)