Which mortgage option?

steve700

I have a £60,000 mortgage - 45k on endowment and 15k on repayment, with 6 years left on my endowment policies.

Would I generaly be better to:

go for a 2 year (5.79%) fixed rate - 10% overpayment allowed

a 5 year (5.99% rate) to almost take me to the end of the mortgage - 10% overpayment allowed

or a 2 year (5.54% rate) tracker - Overpayments whenever

I plan to go £30k each on endowment and repayment to ensure that my 50k expected payment policy easily covers the amount outstanding.........

I know it's personal choice but what option would you take?

Thanks

Steve

Kaz2904

AARGH! JUST LOST A HUGE POST AGAIN! This time I will condense.
5 year 5.99% repayment (6 year term)= £994.09 p/m.
Outstanding at end of fix = £11.5k.
Assuming no interest earned or saved (ie under mattress savings!) £212.97 monthly will give you £11.5k in 54 months.
This allows you to repay your £4.5k cc by January and means you don't need to rely on your endowment to clear the debt.
It also comes under the £1500 you have available each month to overpay.
Just choose the right vehicle and you will be mortgage free in 5 years if not sooner!

steve700

Thanks Kaz.

My income currently consists of about £1100 net standby/callout payments, which my bosses keep threatening to take away, which is why I don't want to go full repayment.

While I have it available, I would pay the maximum additional each month/year and then (after paying the CC off) put any extra in to an ISA or other savings.

You would go for the 5 year fixed then?

Kaz2904

Yes, I'd go with the 5 year fix with a view to clearing it in 5 years. Go onto www.whatsthecost.com to run your scenario with an endowment but I would say that as you have the money there at the moment you should still save it (like you said!).

steve700

Kaz2904 wrote: »

Yes, I'd go with the 5 year fix with a view to clearing it in 5 years. Go onto www.whatsthecost.com to run your scenario with an endowment but I would say that as you have the money there at the moment you should still save it (like you said!).

As it happens, I called up at lunchtime and asked them to send me the paperwork for this.

I can overpay by £499 a month between Feb and Dec, and then up to 10% of the outstanding amount in January.

Interest is calculated monthly and the repayments are set at the beginning of each year.

As long as nothing goes wrong, I'll have it paid off in no time..........:D

Cheers Kaz.