Britannia Mortgage - whats the best thing to do?

aj9648

Hi

I have a 5 year fixed deal with Britannia at 2.79% on an original loan of £150K

At the start of this year this was down to £88K and I overpaid the max 10% (£8.8K) to bring it down to c£80K

My monthly repayment went down to £620 from £700 as a result of this and i cant move it back up to £700 as it would incur penalties. On their site they say I can get my mortgage term to be re-calculated - what does this mean and should I do it? What charges will apply?

I also have £20k sitting in the bank accruing interest - I am assuming that I would be better off hitting the mortgage with this and incurring the penalty as that would decrease my interest cost.

The advisor on the line this morning was very vague and did not seem to help that much !!!!

I have also been looking at other mortgage deals - is it worth exiting this and looking at currently cheaper deals?

getmore4less

probably should have checked the overpayment option before doing them, many lenders have two options, keep the payment the same(reduce term), or reduce payment.

Anyway the extra overpayments are a relatively simple numbers game, comparing rates and the charge.

given that 2.79% is not that bad and there are savings option that can get close I suspect you won't save that much.

you have to look at next fee free overpayment date, the end of the fees completely date, difference in rates and ability to generate more cash to overpay.

to decide if a remortgage is worth the exit fee just do the calculation on what rate you need to make the fe worth while, on small mortgges with highish ERC the new rate is often lower than anything on offer(especialy if there are other fees).