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Mortgage advice needed please
alijo_g
Posts: 8 Forumite
I currently owe £35,000 on an interest only mortgage fixed until 2026 at 5.24%. I can pay as much back as I like without penalty unless I pay it all off and then I will be penalised by about £4,000. So basically I can leave £10.00 owing until 2026 and not have to pay any penalty. What I would like to know is, if there is any better way of paying off the £36,000 at a lower interest rate. Bearing in mind that we plan on paying this off in two years. Thank you
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Comments
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Given that there is a redemption penalty of £4k and you're locked in until 2026, there doesn't seem to be any way to pay at a lower interest rate. If you plan on paying this off within 2 years' time anyway, then you'd be wise to just keep say the £10 balance in there for the remaining 10 years. The interest due will be negligible versus the penalty."If you will change, everything will change for you." - Jim Rohn
I simply use these forums to share my knowledge, reinforce my learning and experience as an IFA. Please remember, if your circumstances are complex, speak with your local IFA from Unbiased or VouchedFor directories for regulated financial advice.0
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