18m to go on Mortgage

Wack1888

I shortly come out of my 2.49% fixed rate with Halifax with appx 18m left to run on the Mortgage. As I'm not now eligible for a 2yr deal will it look like I will have to suck up their 3.99% variable for the remainder of the term? - The projected addt costs for this rate hike over 18m will amount to appx £1200. Switching provider I'm guessing will usually incur the upfront fees which will probably be around the £1000 mark anyway so am I probably best just seeing it through to the end with the Halifax ?
Many thanks

Thrugelmir

Overpay overpay overpay.

Daniel_Sparkes

Do you know if you have an interest only mortgage or a full repayment mortgage?

Daniel_Sparkes

An option you could consider is as follows:

Remortgage to a lender who has no arrangement fee and offers a free valuation, extend the mortgage to 2 years so you're allowed to proceed on a new 2 year product, then within the 2 years utilise the common overpayment facility, for example allowing you to overpay by 10% each year without incurring an early repayment penalty.

I would suggest speaking with a mortgage adviser for guidance on this.

MortgageMamma

Daniel, he can't remortgage to another lender, the minimum mortgage term for the majority of lenders is 3 years, therefore he'd be extending the term of his mortgage and incurring fees as well. I agree with Thruglemir, if you can afford to over pay it as much as possible - to switch to a new deal you would be looking at 500-1200 worth of fees added to the loan anyhow.

Daniel_Sparkes

You're right that most lenders will have a minimum term, typically 5 years, but I know of three lenders that have a minimum term of 1 year, and to boot have no arrangement fee for remortgages.

Appreciate criteria forever changes.

MortgageMamma

But you would have to work out the true cost savings of an interest rate + costs (and there may be some costs even if not arrangement fees) over 2 years plus Halifax SVR over 18 months. I doubt there will be a lot in it, and why extend the term if you don't need to?

kingstreet

What is the actual amount outstanding?

If it's only small, the difference between 3.99% and 1.5% (two year fix or tracker elsewhere) is going to be minimal.

Wack1888

Hi
Appreciate the replies.
O/S is - £40k - int only, and £5k - repayment. = £45k tot.
2x Endowments running alongside.

kingstreet

So the interest at SVR is £1,795pa against £675pa if you can get a rate of 1.5%.

The problems you have are the amount, the term and the need for interest-only.

Normally I'd say talk to a broker, but I suspect most won't have the time for a £45,000 mortgage which will earn a fee-free broker about £144.

Daniel_Sparkes

You should be able to find a broker who takes this on, on an advice fee free basis. They'll need to consider factors such as the potential for a longstanding relationship, opposed to seeing short-term gains.