HELP! Should I ditch my fix?

rnewman83

I'm trying to confirm that it is a good idea to switch mortgages early and pay the ERC as the calculator suggests I should but I want to make sure I'm not missing something.

My current deal has 2 years to run and my remaining balance is £216500. The rate is 6.09%. If I wait until 1st September then my ERC becomes 2% of the balance so around £4500.

It appears as the value of my property has increased a fair bit that my LTV is now 75% so I can get a new mortgage at around 2.39% on a 2 year fix. My rough calculations suggest that my monthly payments would go from £1362 to £900ish.

Can someone put my mind at test and confirm that I should be looking to remortgage early.

Thanks.

Thrugelmir

Which mortgage lender are you considering remortgaging with?

rnewman83

Nothing set in stone but Post office rates look appealing at the moment.

Thrugelmir

rnewman83 wrote: »

My rough calculations suggest that my monthly payments would go from £1362 to £900ish.

So a saving in the region of £5,544.

ERC of £4,500, leaves around a £1k to cover product fees, legal fees, valuation and mortgage exit fees. Which suggests that there will be little saving if any.

Some of the cheaper interest rate Post Office mortgages have product fees of £995 alone. Which wipes any saving.

So product selection is important.

rnewman83

Ok for more accurate figures. if I could get the current post office rate for a 75% LTV on the £216500 plus the £4500 ERC I would need to borrow £221000. This works out at £818 per month including the £995 fee.

My current payment is £1362 so a saving of £544 per month x24 equals £13056.

How does that sound?

dimbo61

Post office doing free legals and free valuation?
With that size of mortgage I would look at a five year fix for security.

Thrugelmir

rnewman83 wrote: »

Ok for more accurate figures. if I could get the current post office rate for a 75% LTV on the £216500 plus the £4500 ERC I would need to borrow £221000. This works out at £818 per month including the £995 fee.

My current payment is £1362 so a saving of £544 per month x24 equals £13056.

How does that sound?

Ignore my earlier figures. As I used 12 not 24 months.

rnewman83

Thanks Thrugelmir.

So I assume if you take into account there's 24 months to run it is a good idea for me to do this?