Had a mortgage too long - it's going, going, gone!

Ali-OK

hiddenshadow wrote: »

We already locked in our rate but with a spreadsheet that handles multiple rates and timeframes, it was easy to see how much (or little) a different rate would save us when it counted OPs. You should get more accurate numbers with a full amortization schedule, which might help determine a clear winner.

If it were me, I'd go with the 7-year fix if I knew I'd get it paid off in those 7 years, just to have the payments/interest known for the remainder of the mortgage. If not, I'd go with the 5-year and take advantage of the lower rate. (That's just gut feeling, though, I'd also run the spreadsheet numbers to make sure they agree )

Big spreadsheet fiddling coming up I think my spreadsheet might be able to do this..if not, I might be shouting for help

I think 7 years is going to be possibly a bit too early to get it all paid off within...I need to number crunch

patanne

Sticking my nose in again. I would try looking at where you will be in 5 years with both interest rates, using the amount that you have to pay, the amount that you currently have to pay & then with any overpayments you are convinced of. There is nothing quite like a bit of spreadsheet fiddling is there?

Luckyinlife

Just for facts and figures can you work out how much you would save buy changeing to a repayment

say for example you fix with a repayment mortage for 5 years or even 3

then make a big OP at the end of what ever term you get

im guessing youll save more than you mentioned buy sticking to the interest only :] the amount you save + the OP money will be huge

hiddenshadow

Ali-OK wrote: »

Big spreadsheet fiddling coming up I think my spreadsheet might be able to do this..if not, I might be shouting for help

I think 7 years is going to be possibly a bit too early to get it all paid off within...I need to number crunch

Happy to send a copy of mine over, I spent my Christmas time making it do all sorts of fancy calculations automatically. (Why yes, I am a geek.)

Ali-OK

Hidden, that would be hugely helpful if you could please. I can admire and appreciate your work in setting it up too I love my figures and spreadsheets but am not as clever with all the formulas and code

Lucky - That's just opened up a whole new element to throw into the mix and potential impact on OPs...that £4,465 ERC I've got to pay, I will need to re-save, plus current accounts are going to be better interest rates vs. the 5 yr 2.59% rate....It's also a no brainer to stay on I/O.

In the depths of my simple spreadsheet calcs at the mo, keeping payments the same (which doesn't take account of wrapping each months interest saving into the next)...it's saying I'm better off by £1,362 if the SVR if the same at 1st March 2021 and 2023...that's not likely.

Still leaning towards the 5 yr at the moment...

Ali-OK

patanne wrote: »

Sticking my nose in again. I would try looking at where you will be in 5 years with both interest rates, using the amount that you have to pay, the amount that you currently have to pay & then with any overpayments you are convinced of. There is nothing quite like a bit of spreadsheet fiddling is there?

Am in my element :rotfl:

Ali-OK

OK, some interesting figures coming out now that set the 2 terms/rates apart a bit more.

The differential in interest I've put in as OP - so the 2.59% rate has additional £50 per month capital. Predicted End Date - December 2023. At the end of the 5 yr fix, I'll owe £47,748 or £50,648 on the 3.19% rate. With the 7 yr fix, it pushes end date back to June 2024.

Interest amounts based on that:

5 yr fix + 2 yr current SVR (but reality is that's unknown) £13,754.14
7 yr fix - £15,729.78

The SVR would need to be over 5.25% or higher (possible, but historically mortgage rates are usually much closer to BoE rates).

in_need_of_direction

Possibly the silliest of questions but why take out a product that limits your overpayments?

Ali-OK

Good point I hadn't thought about.

20% limit per year on I/O products, is more than I'll be able to pay off in the first 3 years. Years 4 and 5, I'll have to max as early as possible (probably take 9 months Y4 and 3-4 months in Y5) and save the rest to OP as a lump at end of Year 5.

If I went the Tracker route, I'd have to hope base rates don't rise for at least 3 years and the rate is 2.49% with current lender.

I don't think there's any point in moving lender - goes back to all the checks, additional fees, plus still got to pay the ERC if leaving and back to a repayment mortgage.

in_need_of_direction

Whenever I was changing mortgages, I would always ask how my existing bank would reward my loyalty. It's never going to hurt. I can't do that anymore as I know I'm not going to better my 0.16% above base.