Remortgage within the fixed term

MSaxp

Hi,

We have the following issue. We bought our house 2.5 years ago on a 5 year fix (!!) for 3.79% (80% LTV)

Based on the valuation of 2.5 years ago, our mortgage is now 65% because we overpayed a bit.

Now i am thinking the following.

Shopping around, I can see that i can get trackers for less than 1.5% for a 65%. So that is 2.29% lower than what we are currently paying (OK, i know this is variable)

Our ERC is 3% of the outstanding mortgage which makes it sound worth paying for a 2.29% saving a year. Even including a new mortgage fee of say $1k.

Does the above make sense? Any flaws in my thinking?

a) Is it likely that a new valuation would at least be +8%, so that we get a 60% LTV mortgage? Looking at the house price index for the area, its more around 12% (Zoopla is about 20%)

b) Would my current lender consider giving me a better deal, given they are about to lose my from a customer?

Thank you

ispookie666

Its simple maths at least to me
If the saving is more that the ERC - jump ship - the process of getting a new deal/new lender is something which is very individual and something which I find it difficult to put a price on.
I do know that Halifax will want you to pay up the ERC before they will consider a better deal!

Contemptuous

No. It's not in their interests to move you from a deal you've tied yourself into. If you leave, they still get their ERC.

getmore4less

Just crunch the numbers, add the ERC and any fees to the new mortgage make the payment the same an see if you will owe less at any point in the future.

Check if the ERC changes before end of term it may be better to wait a bit.

You don't give enough information for anyone to tell you if a chosen deal would save money.

anselld

It is dodgy to compare a tracker with a fix. It might pay off but you would be gutted if you stumped up the 3% to move and then base rates increased before you had time to recover the expense.