Motgage rates going up

charsun

ive got 3 years and 5 months left on my mortgage. my monthly payment is £637.47 i'me overpaying £534.53 which should cut the length of the term in half, want to pay it off as soon as i can, with the threat of interest rates going up should i switch to a fixed deal. ime on the standard veritable rate at the moment

Landofwood

Regardless of rates potentially going up, it's likely that the SVR is costing you more than switching would.

But you may limit your overpaying options and may have to pay an early repayment charge of you switch.

lee111s

You might be worthwile going onto a tracker. Some very good ones at the moment and they often don't have overpayment limits.

What rate are you on at the moment? If SVR I'd imagine around 4%?

Even on a tracker at say 1.29% + base, rates would have to increase by more than 2.5% before you're any worse off...and I doubt that will happen for many years to come!

kingstreet

The outstanding amount and term probably means very little interest is actually being paid, so the interest rate would have little impact on the amount you pay each month.

Try calculators and see.

getmore4less

charsun wrote: »

ive got 3 years and 5 months left on my mortgage. my monthly payment is £637.47 i'me overpaying £534.53 which should cut the length of the term in half, want to pay it off as soon as i can, with the threat of interest rates going up should i switch to a fixed deal. ime on the standard veritable rate at the moment

Mortgage size and rate?

why only thinking about it now?


Anyway quick back of an envelope

£638pm over 3y5m(41m) @ 4% is around £24400 loan
(range for 0%-5% is £26150-£24000)

paying £1172, is 22months

less than 2 years and total interest is <£1k

Find a deal <2% interest <£500. (save around 1/2 a payment)

charsun

ive been thinking about it for a while now, my old fixed deal ended in march. as they were saying the interest rate wouldn't be going up until 2017 i thought i would be better off on the SVR as by then i would have nearly finished paying off my mortgage. ime sill not sure what to do

charsun

ime on the SVR with the nationwide at 3.99%

charsun

i don't want it to limit my overpayment because i want to pay it off as soon as i can

charsun

i owe £24,491.03 at the moment each payment i pay is knocking 2 months off my term, so its cutting it in half

getmore4less

Change the term to 2* years and they have a fix for 1.79%.

£24,491 paying £1172 @3.99 is 22 months £940interest
£24,491 paying £1172 @1.79 is 22 months £410 interest.

Switching saves about £530




* a bit longer if you want some flexibility to reduce payments might not even have to change term depending on the overpayment limits.

edit :

there is also a tracker at 1.59% with no overpayment limits.


Both are no fee

edit 2 fix the current deal put the wrong rate in the calc.

charsun

if i fix you can only overpay by £500 which would make my payment each month £1.137.47, £34.53 cheaper than it is now but it would make the term 2 months longer