Should I move despite early repayment recharge on mortgage?

redrabbit29

I am on the 3rd year of a 5 year fixed deal. It's 5% interest rate - I know that's high but I only put down a 10% deposit and at the time all the talk was about rising interest rates.

I dont want to spend any money in the house as I know I don't want to stay and I feel I've out grown it.

My GF also will join the mortgage and has a lump sum to add to it all.

The exit early charge is £6k

I spoke go an independent mortgage advisor. He said depending on the deal he could save this amount In interest payments as he can find me a deal for 2.4%.

So, is it worth moving early or just staying for 2 more years?

My head says to stay...

quotememiserable

I don't think anyone can answer this but you. Do you think it's worth £6k to move now?

dimbo61

Where are you going to move too?
Is the property OK for the 2 of you for the time being?
You can always overpay as much as possible rather than pay £6,000 in ERC,s
£250 a month for the next 2 years while you see if your relationship will last.
This also gives you time to look for the next property and area

Thrugelmir

redrabbit29 wrote: »

It's 5% interest rate - I know that's high but I only put down a 10% deposit and at the time all the talk was about rising interest rates.

It's not as high as you think. As the world normalises in the years to come. You may come to think how low it was.

thelem

If the mortgage is big enough and there are no other fees involved, then it would indeed be possible to save money by moving your mortgage (by my calculations a mortgage of around £120k would break even, a larger mortgage would make a saving, based on interest going from 5% to 2.4%). I am not an advisor though, so do your own calculations of what you'd owe after two years if you kept everything else the same (repayments, remaining fixed term length).

Assuming you'd at worst break even with a new mortgage, it shouldn't really be a factor about whether you choose to move home. Even if your mortgage was small enough that the fees exceeded the interest payment, you may be able to port your existing mortgage to a new property without paying the ERC.