Remortgage-is this a good deal?

niftythrifty33

Current mortgage with Hsbc:
Mortgage 1: £50,800 at 2.39% with 16 yrs left
Mortgage 2: £3,000 at 1.24% with 5 yrs left

We'd like to pay it all off in 10 years, or ideally 8 years but this would be quite hard. I had a call from Santander to see if they can do a better deal as we now bank with them. DH would like a fixed deal incase rates go up. We currently OP by about £60-£100 each month (no penalty). We can't leave the 3K with hsbc and move the bigger one (not sure why?).

Sant' can do fixed 2 yr at 1.94% over 10 yrs. This means adding the two mortgages together. For just under £500 p/m. We currently pay £440 p/m (without OP).

Is this worth doing? Is there a better way of doing this? We do have some savings we could use to pay off the 3K but DH needs an op' soon with no sick pay for a few months (just SSP) so reluctant to use savings. How about credit cards? We are both 50 in 8 years, the dream would be to clear it all by then

Thanks in advance

getmore4less

Look at the santander followon rate after the 2 years 4.74%

what do the current deals change to and when or are they trackers?

niftythrifty33

Thanks. Does it matter about this if we go straight onto another product?
Current deal is lifetime tracker

getmore4less

If you are going to change every 2 years(maybe fees any on this change?) the new deals will be at higher rates if they go up and your circumstances may change.

Why not just stick with the tracker you have it is a decent rate?
Or look for longer fixes?

£50800 @ 2.39 10y £477, 8y £582.
£3000 @ 1.24 5y £52pm

ThePants999

You'd be saving £207.60/yr in interest, so in one sense it's a good idea. However, by reducing the term, you are essentially committing yourself to the overpayments you're currently making. If there's a period of reduced earnings coming up, I'd recommend sticking to a longer term, and putting overpayments in a savings account. You'll earn more interest than the extra you pay, you have the flexibility if something comes up meaning you need that money, and if you don't, you can use it to overpay later.

niftythrifty33

Thanks Getfore4less.
I can get 1.74% as a loyalty customer with hsbc (just been on their website). For a 2 yr fixed.

The payments you have worked out are different to what I pay currently. The 3K balance on 1.24% is £63.46 p/m
The bigger mortgage is 50.8K on 2.39% is £377.06 p/m

I can't decide what to do, but I think the Santander deal isn't worth doing?

getmore4less

niftythrifty33 wrote: »

Thanks Getfore4less.
I can get 1.74% as a loyalty customer with hsbc (just been on their website). For a 2 yr fixed.

The payments you have worked out are different to what I pay currently. The 3K balance on 1.24% is £63.46 p/m

That should be 49 month (4y 1months not 5 years)

The bigger mortgage is 50.8K on 2.39% is £377.06 p/m

That should be 158m 13y 2m not 16y

I can't decide what to do, but I think the Santander deal isn't worth doing?

I would have a check what your terms really are and see what just overpaying the higher rate to the max will do to finish the mortgage early.

RavingMad

I've just moved from the HSBC 2.39 tracker to 1.74% 2 year fix. You can overpay by 10% per year, so that would help you with your goal of reducing the term