Mortgage help - would I be better off??

CDB199

Can anyone help to say if I would be better off switching current mortgage deals?

Currently have term just under 16yrs left and 131k left to pay on mortgage and early repayment charges and redemption which would bring balance to £133,500. I overpay to £1300 p/m.

Want to reduce the term and take advantage of low rates out there at the moment. Quick scan on money advice service:

Tesco bank 3yr fixed 2.29% £195 fee borrowing £133k to cover mortgage would be £1360p/m, but this is only a 9yr term.

Woolwich has something v.similar but no fees and 3% early repayment charge.

Do you think I should switch??

Am I missing something or is 9yr term far better than 16? I'm saving loads of interest long term rite?

Look forward to any responses. Thanks in advance to any financial savvy people who can point me in right direction.

CDB199

Meant to say, property value around £350k here in uk so really low ltv. With Norwich and peterborough at the mo

ACG

Your saving interest by switching but paying it in a lump sum. It very rarely pays to pay the ERCs.

You might just be better overpying on your mortgage, that way the ERCs are just on the bit your overpaying (over your overpayment limit) rather than the full mortgage amount?

Alternatively overpay as much as you can without incurring charges and then put the rest in a savings account until your deal finishes and then pay off a lump sum?

CDB199

Thanks.

I am currently overpaying as much as I can per month on current deal.

Just assumed that by having just 9yrs left to pay off I would be in much better position than paying the interest over 16yrs?

Thrugelmir

When does your current product expire?

nuzik

Paying an ERC maybe cheaper, if you ccurrently pay what you are paying how long till you clear off your mortgage? You say you are paying 1300 pm but you have a 16 year term what does it do to the length of your mortgage by over paying to this amount, have you asked your lender. Your figures are a little vague.

andyfromotley

i'm not sure that the OP has an ERC on his mortgage does he?

The simple calculation as above is How long and how much will you pay with your current lender if you keep up the current overpayment.

Once you have this figure you can then compare it against the total cost of the loan (with all fees added) that you are looking at.

Don't forget to factor in ERC costs if there are any. Once you have the figures from your existing lender then its pretty simple.

moatanas

CDB199 wrote: »

Can anyone help to say if I would be better off switching current mortgage deals?

Currently have term just under 16yrs left and 131k left to pay on mortgage and early repayment charges and redemption which would bring balance to £133,500. I overpay to £1300 p/m.

Want to reduce the term and take advantage of low rates out there at the moment. Quick scan on money advice service:

Tesco bank 3yr fixed 2.29% £195 fee borrowing £133k to cover mortgage would be £1360p/m, but this is only a 9yr term.

Woolwich has something v.similar but no fees and 3% early repayment charge.

Do you think I should switch??

Am I missing something or is 9yr term far better than 16? I'm saving loads of interest long term rite?

Look forward to any responses. Thanks in advance to any financial savvy people who can point me in right direction.

My Only advice , DONT GO WITH TESCO BANK. They are a ripp off. Will take your money and then will try to find silly excuse to refuse you

CDB199

Thrugelmir wrote: »

When does your current product expire?

19 months and i come off the current fixed rate

CDB199

thanks all.

guess i need to call up and find out how long the term is given i continue to overpay at current levels.

i will ask what the total mortgage cost would be as well.

So in short - if total cost of current mortgage is greater than a new deal, one should switch (plus a little for hassle of changing) ??

nuzik

chances are it will be about 2-3% to get out of your mortgage. Just factoring in all costs