Should I buy out and buy in?

Katiebuck1985

Hi Everyone


I took out a mortgage in November 2014 with a 5% deposit and locked in for 4 years at a rate of 5.89%


I have a mortgage for 230,000 and pay 1521.00 a month and have 22 years left


Early repayment charge is 7k


I could then buy back in at a rate of 1.99% (As price of house has gone up) paying same 1521.00 and reduce it to 15 years.


Should I pay the 7k or wait another 2 years and then lock back in at lower rate in 2 years?


Thanks

enjoyyourshoes

Can you overpay an amount without incurring ERC?

Is the 1.99% another fixed rate?

If so:-

can calculate benefit by comparing like for like (1.99 on same 'term' mortgage and see what the monthly repayment is). If over the period until the first mortgage you save more than the £7K ERP, then the deal might be worth considering.

Consider:-

But what else can you generate currently with the £7K, (between 4-5% interest) , so that is the 'opportunity cost' of not moving mortgage.