Remortgaging - 2 Year/5 Year Fix or Something Different

vipa316

Hi all,

This is the first time I am looking to remortgage my house. I am looking to raise additional funds to for some housing improvements but have a few quick questions to ask if anyone can help.

Current mortgage:
- £113,000 remaining on 13 years
- Interest rate of 4.79% (long story but parent was guarantor so this is all I could initially get)
- £960/month is the current rate
- House valued at roughly £400,000

Looking to get:
- £140,000, term time I am not too fussed as I would look to overpay where possible, initial discussions are around the 24 year mark. As mentioned, for house improvements
- LTV is still under 50%

I have around £30k in savings as well and will look to overpay anything left over after the works as interest rates for savings are so low now. I have no other debts other than student finance, but I am looking to let this come out of my monthly payslip as usual.

I am currently on around £30k annually, but have not had any problems with paying the £960 a month that I have currently been paying. Within 18 month, I should also qualify as a chartered accountant and my salary should increase by 33%-50%.

If I was on a 2 year fix, would my new income make any difference on a potential new remortgage 2 years down the line?
I am under the assumption as my LTV will remain under 50%, the additional income would only allow me to increase my borrowed amount but this should not happen again. I would only consider remortgaging my remaining amount and I presume I currently qualify for the lowest rates so additional income will not make a difference here?

On a 2 year fix, one lender has quoted around £610 a month at 1.99%.

From the interest rate alone I would be making quite a saving. With this rough quote, I would be saving £350/month on my current rate, whilst also saving my current additional amount of £300/£500 a month.

Another lender has offered a 5 year fix, also at 1.99%, which equates to roughly the same monthly repayments, however I am locked in for an additional 3 years at the same rate.

Looking at my current situation and what could happen within the next 2 years, would it be better to go for a 2 year fix and remortgage again or go for a 5 year fix (if both rates are similar), or would you think of something different altogether?

I am most likely to overpay where possible in an attempt to be mortgage free as soon as possible, but this would realistically still be a decade away.

Any advice or information would be much appreciated.

V

Thrugelmir

With £30k of savings why aren't you overpaying the mortgage already.

vipa316

I saved pretty quickly as I knew the works would be planned for around November 2016.

Once the works are done, I will look to save enough to keep me going for 3-6 months should something dramatic happen and overpay the mortgage moving forward. I am not planning any other high cost outgoings now.

xyz123

Have you look ked St trackers. There are products our there where there is no early repayment charge meaning you can change over any any time (keep in mind that every time u change mortgage it generally involves expenses such as fees)

getmore4less

You could look at long term trackers and offset products.

Offset may be the way to go with building work drawdown and a return to rapid savings once the work is done.