Remortgage deal with unlimited overpayments

marc5180

Hi,

My current mortgage deal is coming to an end in June and I'm looking for a new mortgage deal - fixed for 5 years but will allow me to pay unlimited or at least a large amount of overpayments each month.

My mortgage will be about 130k and I will be able to overpay a considerable amount each month, which I'm hoping will clear my debt within the 5 year fixed rate term.

I have at least 50% equity in my house so if available could get a deal with a LTV of 50%.

Thanks in advance.

dimbo61

We took a 5 year fixed offset with ybs
back in 2004 and overpaid each month as well as building up savings in the offset account. We also used friends and family !!!
Offset all the way and still a few lenders doing them !
Now with Barclays on a tracker offset

Thrugelmir

marc5180 wrote: »

My current mortgage deal is coming to an end in June and I'm looking for a new mortgage deal - fixed for 5 years but will allow me to pay unlimited or at least a large amount of overpayments each month.

Not a combination you'll be likely to find. 10% overpayment per annum is probably the best you'll find.

If you can repay the mortgage in under 5 years why go for fixed. Why not a tracker as that would allow unlimited overpayments.

marc5180

I had looked at offset mortgages a while back but discounted them because I assumed that because you still have access to the savings
that are 'offset', it wouldn't be the quickest way to get the mortgage paid off.

I'm not too bothered about having access to the overpayments that I've paid off, I just want the quickest way to get my mortgage paid off.

marc5180

I'd feel much safer fixing for the 5 years at a guaranteed rate rather than worrying where the base rate is going.

I thought that 10% max overpayments was the norm until I came across First direct 5 Year Fixed Repayment - Fee Saver, which says unlimited overpayments.

jimjames

Is that fixed rate or just fixed repayments? Could be very different

marc5180

Fixed rate I believe with unlimited overpayments, unless I'm reading it wrong.

http://mortgages1.firstdirect.com/mortgage-rates/product/5-year-fixed-repayment--fee-saver~70

mvarrier

I understand the desire for stability but do you think banks would be offering 5 year or even 10 year deals below 4% if they thought rates were going to rise?
Nothing is certain but I am happy with my tracker at 1.49 above BoE and unlimited overpayments (HSBC). Even if rates rose by 1.2% to reach the 3.19 of your fix in a couple of years, I will have saved additional money and therefore made extra overpayments in the meantime.

marc5180

The mortgage deal that I'm looking at from first direct is with 65% LTV is 2.28% fixed for 5 years.

If the rates rise even half a percent then the BOE base rate tracker that a lot of people are on won't look so good.

dimbo61

At the time we took out our fix a tracker at 1.49% about base would have been easy to find BUT the BOE base rate was 5.5%
So we took a fix for security as this was a huge mortgage for us.
With help from " family and friends" we managed to offset some of the balance, overpay every month and build up savings in the offset.
Instead of paying the lender nearly £200,000 in mortgage repayments and Interest we repaid £125,000 and cleared the mortgage in 8 years instead of 22
Hard work and cheap holiday, being MSE, old cars, cheap shopping etc
If you can find a good 5 year offset fix then go for it and once you have the mortgage up and running overpay every month while also building savings in the offset.

kingstreet

There's at least one five year fixed with no early repayment penalties at all, so if you wanted to you could repay the whole mortgage during that period.

Have a look around.