Remortgage now rather than post brexit?

DocHants

As theres a lot of uncertainty around whats going to happen post brexit.. (probably something between nothing and the apocalypse), Im wondering if I should pay a 2k early redemption fee and secure another 5yr deal, rather than just waiting to see what happens in April 2019 when my current deal expires.

My mortgage is made up of two, both 5 year fixed rate, one of which comes to the end of its 5 years in June next year, the other in April 2019. Im thinking about looking at another 5 year fixed to kick in in June next year, so I only have to pay 1 early redemption fee of around £2k. The deals around now would shave off around £250 a month of what Im currently paying, so any fees I do pay (circa £3k), could be recouped within 14 months, then I will carry on overpaying by £250 a month.

The rates seem really good at the moment, and arent likely to get much better.. but I suppose the gamble is, could they get significantly worse, especially around post brexit, when I have to renew...

muhandis

No one can credibly forecast what interest rates, the exchange rate or the FTSE will be in 2019. I doubt anyone thought 2.5 years ago that at the beginning of 2017 the base rate would be 0.25% or the £ would be where it is.

Having said that, if your particular circumstances do indeed work out such that the interest saved by switching now to a 5 year fix more than pays off the ERC and leaves you saving a lot of interest, you should definitely consider going ahead.

DocHants wrote: »

but I suppose the gamble is, could they get significantly worse, especially around post brexit, when I have to renew...

Thrugelmir

DocHants wrote: »

As theres a lot of uncertainty around whats going to happen post brexit.. (probably something between nothing and the apocalypse), .

Interest rates could change on any number of factors. Many of which existed well before the referendum. Brexit was merely a trigger as brought the UK economy and state of finances into front line focus of the markets. BOE's mandate is two fold, one to provide financial stability and the other to control inflation. Their forecasting is longer term and correspondingly decisions made are pre-emptive rather than reactionary.

Decisions are best made on what you know now for certain and how they impact you on a personal level. Crunching the numbers as to financial benefit obviously being the key.

June is a little time away yet. Depending on the interest rates you are currently paying. Making overpayments may well your best option to at least minimise any impact of a changing market place.

AnotherJoe

DocHants wrote: »

As theres a lot of uncertainty around whats going to happen post brexit.. (probably something between nothing and the apocalypse), Im wondering if I should pay a 2k early redemption fee and secure another 5yr deal, rather than just waiting to see what happens in April 2019 when my current deal expires.

.

There's a lot of uncertainty anyway, all the time. Brexit is an irrelevance in comparison to all the other factors going on (many of which no one knows now anyway) , it will most likely provide a brake on levels rising high and fast and that's as much as can be said.

I would suggest you do whatever works financially for you with rates right now. I'd be more oncerend about five year fixes which have other issues such as high ERCs and higher repayments. You'll have already paid more than necessary over the last few years by getting five year fixes last time.

kinger101

All these people who say we can't predict interest rates are talking absolute rubbish. Mark Carney does it all the time using a sophisticated model. The basics of this are in the diagram below.

csgohan4

kinger101 wrote: »

All these people who say we can't predict interest rates are talking absolute rubbish. Mark Carney does it all the time using a sophisticated model. The basics of this are in the diagram below.

Lol I remember doing that as a kid, those were the days

DocHants

Cheers for all the input.. I was expecting a black/white answer, just looking for food for thought. and youve all pretty much advised the rather obvious solution of doing what is right at this moment in time. Lets face it, rates are as good as they have been for a long time, and if I can knock nearly 1.5% off, which equates to nearly £200 per month.. thats not a bad saving, especially over the 5 year period.

amnblog

DocHants wrote: »

As theres a lot of uncertainty around whats going to happen post brexit.. (probably something between nothing and the apocalypse), Im wondering if I should pay a 2k early redemption fee and secure another 5yr deal, rather than just waiting to see what happens in April 2019 when my current deal expires.

My mortgage is made up of two, both 5 year fixed rate, one of which comes to the end of its 5 years in June next year, the other in April 2019. Im thinking about looking at another 5 year fixed to kick in in June next year, so I only have to pay 1 early redemption fee of around £2k. The deals around now would shave off around £250 a month of what Im currently paying, so any fees I do pay (circa £3k), could be recouped within 14 months, then I will carry on overpaying by £250 a month.

The rates seem really good at the moment, and arent likely to get much better.. but I suppose the gamble is, could they get significantly worse, especially around post brexit, when I have to renew...

Are you saying you are looking to select a rate now to kick in in June?

steampowered

It sounds like you are considering remortgaging in June 2017, before your current deal expires in April 2019.

There are 22 months between June 2017 and April 2019. You say you can save £250 a month by remortgaging.

Based on that, remortgaging would save you £5,500.

As the break fee is only £2k remortgaging sounds like a no-brainer. It may even be worth remortgaging now rather than waiting until June, even if that results in a higher break fee.