Remortgage now or wait till fix ends

davilown

As per the the title, I'm in a quandary as to whether to wait until my fix ends or take advantage of the really good rates currently available and whilst I still have my current job.

Currently 19 months left on a 3.39% fix with the WestBrom.

House is valued conservatively at £375,000 (neighbours just sold for £389,000 identical house and condition).

Owe £188,000 with 19 years left.

We'd like to take advantage of the 5 (or perhaps 10) year fix with FirstDirect @ 1.74% (or 2.49%) over the 25 years at £802 pm (£874).

Joint income is is around £90,000 with 2 dependants, 2 cars on HP and one loan (work on the house) totalling £650 pm with no other debts.

All other outgoings are as per standard monthly DDs.

As we currently pay £1200 pm on the mortgage, we'd like to carry on over paying to that amount each month.

The second part is slightly more difficult as I will be leaving my job in Nov 18 and starting a new career. Whilst this may sound odd, I will have a yearly income of £12,000 and my OH will be on £42,000 so the mortgage will still be affordable. In addition, I have a lump sum of around £55,000 which will pay off both the cars, £37,5000 off the mortgage and leave around £10,000 in savings for 'just in case' scenarios.

Would it be sensible to fix long term now?

Any advice and guidance would be greatly appreciated.

Thrugelmir

What's the Early Repayment Charge that you would incur?

davilown

Hi Thrugelmir - 3% so around £6,000

getmore4less

current in 19 months

£188,000 @ 3.39% £1,200pm £174,963

add the ERC(3% £5,640) and fees?

£193,640 @ 1.74% £1200pm £175,945

so at least £1k down more if there are other fees.

if you switch the 5y fix at y5 will be

£193,640 @ 1.74% £1200pm £136,060

now erc free over the next 41 months
£174,963 @ 1.93% £1200pm £136,063

Your call, will rates go up by over 0.2%. in the next 19months

The fees will change this but if you assume they are likely to be similar the numbers will stay close(ish).


income down £2k a month even with the £55k you will free up less than that

If you started living on the new target salary now(pay your debts from that £2k as they will be gone dec 19) you could make a serious dent in that debt and the mortgage and be ready for the change,
It might take a few months to settle to the lower income and this way you can adjust without hitting the £10k you plan to put aside(will be a lot more by then).

davilown

getmore4less wrote: »

current in 19 months

£188,000 @ 3.39% £1,200pm £174,963

add the ERC(3% £5,640) and fees?

£193,640 @ 1.74% £1200pm £175,945

so at least £1k down more if there are other fees.

if you switch the 5y fix at y5 will be

£193,640 @ 1.74% £1200pm £136,060

now erc free over the next 41 months
£174,963 @ 1.93% £1200pm £136,063

Your call, will rates go up by over 0.2%. in the next 19months

The fees will change this but if you assume they are likely to be similar the numbers will stay close(ish).


income down £2k a month even with the £55k you will free up less than that

If you started living on the new target salary now(pay your debts from that £2k as they will be gone dec 19) you could make a serious dent in that debt and the mortgage and be ready for the change,
It might take a few months to settle to the lower income and this way you can adjust without hitting the £10k you plan to put aside(will be a lot more by then).

Thanks for working it out for me Getmoreforless, makes it seem not sensible to remortgage now.

Just worried about interest rates rising - just got the mortgage statement and it is a few thousand less owed than I anticipated and the ERC ends 3 months prior to the end of the mortgage fix.

How do lenders look at those who are leave their job within a few weeks of wanting to take a mortgage out but have a guaranteed income? If they want proof how would I get it?

thanks again