Worry about fixed rate ending

frogga

Good Morning everyone,
We have a fixed rate mortgage at 3.99% at present and we paying £659.12 a month for a £107,000 mortgage with 19 yrs left to pay. It was fixed for 2 yrs but This will end soon and I am really frightened about how much more we will end up paying.

At present we are with Northern Rock and have had 2 year deals continually since we took the mortgae out in 2000, however we have been charged £1000 everytime we renegotiate so it feals like we just keep adding to the mortgage not paying it off. Just don't know what's best so far as getting another fixed rate. Northern Rock have offered 5% for another 2 yrs, but it will cost us £1000 in fees and is an extra £100 on what we are paying at present. Any advice anyone ? Would be grateful for any at all!

dylansmum

Hi

There are better deals around but it depends often on how much equity you have as some excellent no or low fee deals require you to own more equity. Remember, the discount isn't always that real - NR are clawing it (or part of it) back via the fee, but if you look at flexible mortages where you can overpay, you'd be better putting the fee as an voerpayment and shaving off capital and thus saving interest. All depends on what you can afford though.

Wise ones will help than me I'm sure, but do shop around - eg. ING or Rugby BS have none or lower fees with good rates.

frogga

don't want to be a thickie but a bit confused about what you said! ~ I'll try to reply though! The house is worth about £200,000 now as prices in this area have sored and we have extended since we bought so we do have alot of equity. I thought we would have some rewards from NR for being a loyal customer for the last 7 years. Also I think if we go with someone else we have to pay a penalty to NR. If we got a flexible rate mortgage wouldn't that mean that the repayments would keep changing from month to month. That would be very hard for us on a limited budget. Also I couldn't affoard to over pay as money is really tight. Thanks for advice about ING and Rugby BS ~ I'll look into them xx

dylansmum

frogga wrote: »

don't want to be a thickie but a bit confused about what you said! ~ I'll try to reply though! The house is worth about £200,000 now as prices in this area have sored and we have extended since we bought so we do have alot of equity. I thought we would have some rewards from NR for being a loyal customer for the last 7 years. Also I think if we go with someone else we have to pay a penalty to NR. If we got a flexible rate mortgage wouldn't that mean that the repayments would keep changing from month to month. That would be very hard for us on a limited budget. Also I couldn't affoard to over pay as money is really tight. Thanks for advice about ING and Rugby BS ~ I'll look into them xx

Hi

Sorry for the confusion. The more equity you have can often mean cheaper deals - if you have 40% equity then there are cheaper aprs on trackers available and some products are only available if you have more than 10% equity..

Repayments: on a variable rate they only change if the base rate goes up - yes very likely, of course. But you could look into trackers that are fixed to follow the base rate at a discount. Yes, it is a gamble but fixed rates can be more expensive depending on the fees etc.

A good way is to work out priorities- cheaper over a short period or cheaper over a longer period. Money Facts website has a decent search facility that shows you true cost over five years.

Penalites - well, if you've already signed to stay with NR, yes, but if not you might be ok if your deal and tie-ins are at the end?