Remortgaging dilemma

Benjibabes

Hi all,

New poster here. I have a dilemma I'm hoping some of you will help me make a decision about. My current mortgage deal expires at the end of this month, and I have been looking at several new deals (with high street lenders) that would lower my monthly payments by around £100 (interest rates of around 3.2%). Sounds great, but I've just had a letter from my current mortgage provider saying that if I remain with them on their variable rate (2.5%), then my new payment would be about the same as what's on offer from the high street lenders.

My question is, should I stay with my current lender on the variable rate ( I know the rate could rise, but let's be honest, there's no real indication that the Bank of England has any plans to raise interest rates anytime soon), or should I go for another fixed-term deal with a new lender that will charge me additional fees?

I appreciate any advice on offer.

B

AnotherJoe

I'd stay with your current provider at the new low rate, unless you can go for a really long fix, for example someone here was posting about a ten year fix at your sort of rate, 2.5%.
But then again I have no idea what will happen to interest rates over the next few years.
But then again, neither does anyone else

One question, why would you be paying "about the same" if on 3.2% or 2.5% ???? Surely the 2.5% would be less

Thrugelmir

Stay with your existing lender. The best defence is to overpay now while rates are low. As the less you owe every month the less interest you'll eventually pay.

hcb42

does current lender not have any fixed deals to stay with them? I am with halifax and have not paid any fees for a new product (1.99% in my case - last July)

getmore4less

Details would help amount LTV and which 2.5% variable lender.

it may be that that rate comes with other benfits also your current lender may also have retention options that are cheaper did you look at those?

Benjibabes

My LTV is around 30% and my current variable lender is C&G. And no, I haven't looked at any retention options, but I will now. Thanks

Thrugelmir

Once you leave the 2.5% rate you are not guaranteed to obtain an SVR of 2% above BOE base. On new mortgages the SVR defaults to 3.99% or 3.49% above base rate.

MortgageMamma

How long do you have left on your mortgage? If its not long then perhaps a long term fixed at a low rate would be an option. If you overpay it then you could be mortgage free sooner

Benjibabes

Still another 20 years to go on my mortgage term...

Thank you all so much for your responses, they are much appreciated. I think I'll probably stick with the SVR for now and start overpayments to help clear it quicker, and then at the first sign of interest rates being raised I'll look into finding a fixed rate deal.