what to do with two mortgages at end of fixed rate

veruccasalt

I wonder if anyone can give me some mortgage help.


We have two mortgages on our house, from when we bought it and then when we borrowed a load more to build an extension. Both are currently with HSBC

First mortgage is down to about £40,000. THis is on a CAT standard mortgage where the interest can not be higher than 1% above bank base rate, so we are currently paying just 1.5% interest on that. It has another 7 years to go.


Second mortgage is £90,000, with about 10 years to go. THis comes to the end of a 5 year fix at the end of March.

My choices are to keep the small mortgage as it is, and take the chance that base rate doesn't rise much over the next few years. We overpay it a bit, so its not too much of a worry. If I do this, I will need to keep the bigger mortgage with the same lender I think.


My other choice is to get rid of both of them, and borrow the whole £130K from a new lender. I could do this over 9 years.


Any views, anyone? TIA.

getmore4less

overpay the higher rate not the 1.5%.

See if you can extend(as long as possible) the term of the 1.5, redirect payments to the other bit(save till march if penalties), for which you might look at a new deal in march(with same lender) if the follow on rate is too high.