Remortgage question

andyheron

Mortgage due to end next month, 19 years left owing 127k and Halifax have offered a number of deals all with product fees ranging from £249 upto £999
monthly payments will increase as I expected, just unsure which to go for but was looking at a 2 yr fixed at 6.24% which would increase monthly payments up £130 per month.

However, a friend who is a mortgage broker has suggested a similar Halifax product paying only £40 extra a month on a 2 yr fixed but over 23 years. He then says in 2 years to change with rates being lower and reduce to 17 years.

Is this common practice to others ie playing the market? Or is it best to keep reducing the time with the Halifax doing it myself.

Thanks in advance.

MarkyMarkD

I don't see the point in increasing the term in this way, just to reduce payments in the short term.

Unless you are really strapped for cash, it's better to keep to your original term and pay off the mortgage over a sensible (i.e. shorter) period.

herbiesjp

andyheron wrote: »

However, a friend who is a mortgage broker has suggested a similar Halifax product paying only £40 extra a month on a 2 yr fixed but over 23 years. He then says in 2 years to change with rates being lower and reduce to 17 years.

Is this common practice to others ie playing the market? Or is it best to keep reducing the time with the Halifax doing it myself.

Thanks in advance.

How can he be sure rates will be lower in 2 years? They may well be lower, they could be the same, or they could be higher. And by shortening the term to back down to 17 years will automatically increase your repayments again

poppy10_2

andyheron wrote: »

He then says in 2 years to change with rates being lower and reduce to 17 years.

Ooh, can I have a go on his crystal ball when he is finished with it? :rotfl:

Seriously, interest rates are still below the long term average, and have as much (or more) chance of going up than they have of going down in 2 years time.