Remortgage HELP, what should I do ?

RifRaf74

Hi all

I took out a 2 year fixed deal with A&L which comes to an end in November. At present I owe £103000 and have 20 years left, I can't overpay on my current product so thought about changing to a flexible mortgage so I can throw any extra cash at it I have each month.

I currently pay £637 a month @ 4.24% and have been told the flexible mortgage @ 5.59% would increase my payments to £727 on a 20 year term.

I should be able to pay at least £100 extra each month and was wondering if I should bother with the flexible mortgage @ 20 years or just take another 2 year fixed but reduce the term to 15 years as I would still be paying the same amount each month.

Thought I had got my head around this and then couldn't decide whether it would make that much difference.

Thanks

KTF

Having a 20 year mortgage and overpaying (i.e. paying the same monthly payment as a 15 year term) is the same result as having a 15 year term but not overpaying.

However, the advantage of having the overpayment is that you have the option to stop if money becomes tight for whatever reason rather than with stuck with a large mortgage payment every month.

RifRaf74

Cheers KTF that's roughly what I thought. Apart from the rates differ slightly on a fixed & flexible mortgage.

Lizzy

I would go with the flexible one for the reasons stated above. You never know when there might be a rainy day and that overpayment money may come in very handy.