Remortgage or hold out

getmore4less

Base+0.99% mad to change to anything else now and most likely for considerable time.

If you think you might need/want to move then start saving don't overpay.

Unlikley you will ever get lending this good again.

Jhoney_2

I have a similar deal and was going to overpay the saving back into the mortgage every month. But I am torn because I don't understand the impact the overpayments will make. Although there is some interest to gain - @ c2%, it's got to better overpaying in terms of preventing accrued interest on the mortgage over the same period or in the long run hasn't it? The calculators here say any savings account paying over 1.7% is worth diverting the money into given the present mtg rate.

I should also add that I intend to move and probably reduce mortgage significantly (3/5) in the next 12months so not sure how to make sure I pick the right short term option. Emergencies etc are already covered. Any thoughts please? Apologies if this seems like a stupid question, but I truly have not been able to resolve this by myself so far.

mark55man

Jhoney - I think I would package that up into a question on a new thread as you are more likely to get a clear answer and follow ups specific to your needs

Jhoney_2

Thanks Mark88man, I will give that a try.

mark55man

http://www.thisismoney.co.uk/money/news/article-1607881/When-UK-rates-rise.html?ITO=1490&ns_mchannel=rss&ns_campaign=1490&hootPostID=407ccb16c741242f9f705681b305a901

If real life transpires as this prediction - you would still only by at bank rates of 1.5% in 2018 making your current variable rate cheaper than the 10 year

so a combination of a weather eye on the long term fixes, overpayment (eg using your target 3.5%) should see you able to get a fix 5 years out competitive to today and with a much higher LTV to reduce payments (owe less) and support a more competitive mortgage (more desirable/affordable)

racing_blue

How do you mean, maddieshae?

What sort of flaws might there be with the 10 year fix, which would not be apparent until later?

I'm guessing early repayment charges would be transparent from the outset, and can't think of much else.

mark55man

The flaws are more that your assumptions as to why a 10 year fix is good turn out wrong

I went for it assuming that QE would bring inflation and higher rates. it didnt instead we have had 6 years at 0.5%

So what the 10 year fix is, is insurance - but maybe its a premium you dont have to pay. I suggest at the point you realise your assumptions are wrong you have spent a lot in interest that could have been used for repayment.

If you have repaid as aove, then when we do get 5 years down the line you are then in a better position to remortgage, AND you owe less, AND rates will have to go completely crazy before you will be better off having taken the 10 year mortgage

of course if rates DO go crazy you will be better off - but the high cost of protection and low likelihood makes this a poor choice IMHO on the balance of probabilities

getmore4less

The obvious flaw with a mortgage where you are paying more is your debt goes down slower.

Smaller debt is one of the best protections against rate rises.