Should I pay ERC to get a better rate?

clairecymru

I have 10 months remaining in my fixed rate mortgage. I took out a 95% mortgage over 29 years with an interest rate of 5.01%. My ERC is £2,500.

Based on current property sales nearby my home is worth £100,000. I owe £78,000 on the mortgage.

Looking a current mortgage rates for 80% LTV I could knock £100 a month off my mortgage or pay what I am currently paying but knock 7 years off the term.

Am I better off paying ERC to get better rate or just sticking out for another 10 months until my fixed term ends.

Thrugelmir

10 months saving at £100 = £1,000.

ERC = £2,500 Plus costs of remortgaging.

On the face of it no saving. If you can afford to overpay the mortgage by whatever you can. That will save you money and improve your LTV quicker.

getmore4less

Add the fees make the payment the same and see whats left in 10 months

£78k 5.01% lets say you are paying around £450pm now.

adding £2500 you need a rate of 1.1% or better to break even in 10 months.