Help! Should I Ditch my Fix??

Nate17

Hi all,

I was hoping somebody might be able to give me some advice on whether it worth me ditching my current fix mortgage? I have checked the MSE Ditch the fix calculator and it said that I should ditch my fix I can find a mortgage with a rate less than 2.45%...

My circumstance is that I am moving home and borrowing more for the purchase (new build and purchasing free hold), I currently have a 5 year fixed mortgage with TSB with a few different rates and end dates which I’ll highlight below,

Current mortgage:

£87644 @ 3.49% (24 months remaining)
£56032 @ 4.84% (31 months remaining)

ERC £4309 (sufficient funds available to pay)

Additional offered to purchase new home:

£64954 @ 2.09 - which includes freehold and stamp duty @ £3000 and £3848 respectively.

Total borrowing is £208,630 over a term of 34 years.

Property being purchased at £277,950 (+£3000 FH and £3848 SD)

Approximate monthly repayment is £869.94

We intend to remain in this property for at least 5 years so are looking to fix again for that period albeit at a lower rate.

The 5 year fix I have found is with HSBC is 1.99% fixed, fees £999 with a monthly mortgage payment of £741. (term of 30 years as opposed to 34 years)

Is it worth me buying out of my deal as I sell my current property and taking a new mortgage or carrying on with what has been offered by TSB?

I’ve been scratching my head for a while now so any advice would be really appreciated!!

getmore4less

Would help to have the breakdown of the current sub account payments and follow on rates and retention deals(no fee) of current lender might not need them but just in case when I do the numbers a bit later.

is that extra TSB @2.09 a 5y fix?

Nate17

Hi and thank you for your response!

I've had a quick chat with TSB and they've given me some up to date details on our current fix.

£87644 @ 3.49% (actually 27 months remaining)
£56032 @ 4.84% (31 months remaining)

When each deal finishes they will move onto a rate of 3.74%.

I haven't been able to confirm yet if the 2.09% is fixed and if so for what period... Going by information on the website it would appear that it is a fixed rate, either 2 or 5 years...

I am waiting to hear back from the branch...

getmore4less

OK I will start with that and have a look on TSB site for potential follow on rates on the current deals and a guess(2 or 5) on the new bit.

(real payments on each current bit would help one less thing to reverse engineer/guess)

Nate17

Sorry about that, I do have that information.

Existing parts over 34 yrs

£87644 @ 3.49 = £367.17
£56032 @ 4.84 = 280.23

additional over 34 yrs

£64954 @ 2.09 = roughly £222.54

Hope that helps?

getmore4less

OK lets do the easy bit over 2 years to start and see if we need any more information.

I have guessed the payments and rounded up to the next £1


what TSB will give you(assume at least a 2y fix) in 24months you will owe
£87,644 @ 3.49% £368pm £84,837
£56,032 @ 4.84% £281pm £54,649
£64,954 @ 2.09% £223pm £62,264

---

£208,630

---

£872pm £201,750

Add the ERC and fees (£4309 + £999)
(Paying up front makes a tiny difference to the calculations)

£213,938 @ 1.99% £872pm £201,285


OK we don't need all the other stuff you are ahead £465 within 2 years.
Break even will be 2 ish months before that

edit: missed your post with the numbers these are close enough.)

edit 2: forgot to say at 2 years you are paying capital by around £240pm more on the new deal than the old deal so by 27 months you will be over £1k ahead.