Remortgage query

tboo

Hope this is the correct area to post
We (husband and I) hope to be mortgage free in a few years if all goes to plan

I’m not any good at maths, don’t understand mortgages etc so never looked again. the hubby leaves it to me and until Jan this year I never thought about really overpaying any more than I do now


Details
Our mortgage was £98.675.00, this started Jan 2008 and ends 2028 = 11 years and 8 months left.
On the paperwork the interest is variable, daily and current interest rate is 0.65%, statements are received in Oct each year and the current monthly payment is £434.48
The original interest rate was 5.67%, payments were £688.28 then in Nov 2009 it changed to £435.63 then Oct 2013 to £434.48 - but we left the payments alone so been overpaying from 2009, give or take each month the o/p was £255
Then in Jan this year – my lightbulb moment - we started overpaying as much as we could afford which is an extra £585, so the o/p is now around £840 per month
At 21 April 2016 the balance is £33593.09

So on the calculator - I put in 12 years remaining.
“Normally you repay £435 per month. If you regularly overpay £840, you'd be mortgage free 9 years and 5 months earlier”


So a couple of questions please
Is it worth looking at a remortgage when the balance is so low?
Does it matter about the rate as I've looked online and they are higher

Thanks in advance

Thrugelmir

With such a low interest rate that won't be bettered. There's no point in remortgaging.

tboo

The interest is off the annual statement - not sure if it's monthly or annually. If it's annually then great stuff.
How do I find out? Ring them or is there a way to work it out!

Told you I was dense :-)

RavingMad

How much interest are you paying per month? If it's around £20pm then I'd say that's the annual interest rate.

tboo

From the statement received in October 15
The following interest rates were applied to your mortgage during the statement period
01/10/14 to 30/09/15 0.67%
Current interest rate as at 30/09/15 0.67%
Interest charged for this period £307.34

tboo

sorry further information if needed
Previous balance = 50439.01
Current = 42021.20
Interest = 307.34
As at Oct 2015

RavingMad

0.67% will be the annual rate, which is a great and as thrug's said, won't be bettered.

Guessing you must have signed up for a tracker mortgage at the time and benefited from the base rate cuts. At some point you might look at a fixed rate mortgage if rates start going up, but we're told that they'll only go to 2.5% in the medium term

AnotherJoe

Don't even think about remortgaging that is a fantastic interest rate

At present you would be better off not be overpaying, but putting those overpayments into high rate current and savings accounts with an aim to eventually paying off the mortage with that saved money. In the meantime the interest you make would greatly outweigh the saved interest payments on the mortage.

Every thousand pounds you overpay off the mortgage saves you £6.70 a year. If you saved that with say Santander you'd instead get about £30 a year (you could do better with other accounts but not up to as much money saved). If you saved the max £20k in a Santander 123 account, in a year you'd get £600 whilst had you paid off the mortage you'd save £134. So nearly £500 better off which is effectively an extra months repayment more than you currently make ( though you are saving it not paying it off)


You can have three S123 accounts so you could each year make an extra £1500 or three overpayments worth savings. Over a few years this would trim off a year or two off your mortgage because once you got to say the full sixty thousand saved you could them pay off the mortage as a lump sum. This would all be risk free,

Should interest rates on your mortgage rise and the difference between savings rates and mortgage rates not make this worth doing, you have the lump sum saved and could pay off at that point.

andrewmp

Overpaying is probably the worst thin you can do with rates as low as that. As someone has said, save at 3% with Santander and pocket the difference.

tboo

Mortgage offer said it's a lifetime tracker.

We initially saved into a TSB ISA but their rates are non existant so overpaying the mortgage seemed a better idea.

Hubbys reluctant to change from a bank he's been with since he was a teenager but he will see the light.

Thanks for all your help and I shall talk to DH and give him the infomation.