Remortgage when debt is really small?

sonny_c

Hello everyone,

My current 5 year fixed deal at 3.39% end's 30th June with Co-Op bank

LTV ratio is 19% with balance of £19K and 2 years remaining to be MF

Options

Revert to SVR currently 4.49% and make overpayments to reduce term further. Should be able to make OP of £5K 1st year and not sure of remaining year.

Co-Op bank have offered me a internal re-mortgage with Britannia 2 year fixed 1.74% with no fee, options to make over-payments up to 10% of balance. Over-payment fund would be lost and any over-payments would reduce monthly payment. Early repayment charges apply of 2% of the amount paid + fees in 1st year and 1% the remainder.

Any help would be appreciated
Thanks

Thrugelmir

How many years does your existing mortgage term have left to run?

sonny_c

2 years 2 months

Thrugelmir

Might as well take the 2 year fix then. Drip feed the overpayments to leave a £1 balance at the end of 2 years. Then you'll incur no ERC's.

getmore4less

Do the numbers the savings are not that much..

£19k 2 years, rate, payment, interest.

@ 3.39% £820pm £678
@ 4.49% £829pm £901
@ 1.74% £806pm £346
@ 0.00% £792pm £0

if you can get a 0% purchase credit card and max all normal spending on that, use the saving to reduce you balance as you move onto the 1.74% you can eat into the £346 interest you pay over the next 2 years.

If you could overpay the max ERC free £1,900 at the start that saves you £35

don't forget if you can find a savings account that pays more than 1.74% you might as well save rather than overpay check out monthly savers for your overpayments, combined with a 0% purchase credit card you could make a few £

sonny_c

Many thanks that's just what I required.