MSE News: Warning: Cheapest-ever mortgages are disappearing – ACT NOW and save £1000s

Legacy_user

Review options this Xmas in case best buys vanish, eg, 1.17% 2yr fix...

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'Warning: Cheapest-ever mortgages are disappearing – yet ACT NOW and you could still save £1,000s'

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Westminster

I was mistakenly under the impression that my 2 year fix with Barclays which ends in April 2017 would have an ERC - but digging out the paperwork reveals there is none (confirmed by a quick call to their call centre).

So we are on the case today to remortgage.

Stigofthedump_2

is it worth fixing on a remaining mortgage of £19k at 2.5% paying £1300/month - predicted full paid off in 16 months?

Norscbu

Stigofthedump wrote: »

is it worth fixing on a remaining mortgage of £19k at 2.5% paying £1300/month - predicted full paid off in 16 months?

You can secure 2.5% with a nationwide loan http://www.nationwide.co.uk/products/loans/service/loans-price-promise

(sains do a 3/3.1% loan http://www.moneysavingexpert.com/loans/cheap-personal-loans#15k20k)

amnblog

Stigofthedump wrote: »

is it worth fixing on a remaining mortgage of £19k at 2.5% paying £1300/month - predicted full paid off in 16 months?

IF the rate went up 1% tomorrow it might cost you £225 between now and April 2008.

(The article refers to fixed rates, not the base rate)

phillw

Stigofthedump wrote: »

is it worth fixing on a remaining mortgage of £19k at 2.5% paying £1300/month - predicted full paid off in 16 months?

If you can do it without paying a fee.

If you switched to a 2 year 2% deal with a £1k fee then you are upfront paying 5% of your outstanding balance. If your current 2.5% is fixed then it's pretty easy to just plug the figures into a mortgage calculator and compare them, my guess is that you wouldn't be able to beat what you have now. If it's variable then it's more complicated as not only would you need to predict the rate rise, but also when it rose. The longer it takes before your rate rises, the higher the raise would have to be to outweigh the upfront fee.

I think you'd need a 3% rate rise tomorrow to justify a £1k fee. Of course a 5.5% mortgage isn't unusual, but I don't see it happening in the next year. By then your balance will be so small that you probably won't care what the rate is.