ReMortgage or not (deal ends 2018)

steeeb

I'd like some advice as to whether I'd save some money switching my mortgage at this point.

I am on a 5 year fixed rate with RBS at 4.79% which ends at the end of Jan 2018.

The penalty for coming out of the fixed rate is I think 5% in the first year, 4% in the 2nd, 3% in the 3rd, 2% in the 4th and 1% in the final year. So my penalty would be 4%.

The balance outstanding is 103k on originally 122.5k property (although this is now worth 165k due to a total renovation).

The mortgage is over 35 years, with 33.5 years remaining - I overpay quite frequently. (So no idea how long I *actually* have left).

I'm wondering if it actually works out better to switch now and would I be better off by the time the current deal ends for switching to something at around 2.5%. (Or if things stayed the same, doing so once it gets to 3% penalty?)

I would plan on increasing the mortgage to take into account an product fees and the early payment charge from my current mortgage.

Anyone able to advise if I would be better of switching or not?

steeeb

The way I see it, if we round it off at 100k, then it'll cost be 4k to get out of the deal now.

If I switch to something around 2.5%, I'll be saving around 2k a year over the 3.5 years I have remaining, meaning around 7k, so 3k better off.

That isn't taking actual amortization into account, and only if the interest rates stays stable.

But I'd be better off, wouldn't I?

Thrugelmir

steeeb wrote: »

If I switch to something around 2.5%,

That's optimistic.

pjread

5 year fixed... I'd guess 3.19-3.29 is the best out there?

steeeb

Sorry, switching to a 2 year fixed. My LTV was 90% it's now near 60%.

Thrugelmir

and the follow on rate in 2 years time?

steeeb

Likely to be under the 4.79% I have now.

lee111s

Need to factor in any fees for changing deals also.

dimbo61

You need o take into account ALL the remortgage costs and what a surveyor will value your property at now?
He will go on recent sales and unless you have added a huge single or two storey extension you may find his/her valuation less than you think/Hope!
However "I overpay quite frequently " maybe the way to go.
Most fixed rate mortgages allow 10% overpayments every year and 4.79% is not bad ( We paid 4.79% in 2005 fixed for 5 years and had 50% LTV)
4% ERC and all the other costs to remortgage :-(


" Likely to be under the 4.79% I have now."

Most SVR are 3.99/4.95/4.99 and even 5.99% with the BOE base rate at 0.5% in two years it could be 6/7/8%