Mortgage changes. Does this sound okay?

bazza1603

Hi,

We are about to stick in a offer for a new house.

We have sold ours for £171k. I currently owe £65341.38 over 20 years at a fixed rate of 5.17 until Mar 12. I overpay £92 a month.

I need to lend another £19k for a new house. I have been looking at a new fee free mortgage with HSBC which work out £144 over 10 years at 6.69 fixed, however if I go for a Homestart the mortgage will come down to £106 for the 1st 3 years and then rise to £156.

We are due a 2nd baby soon, so 2 lots of nursery fees will hit us hard for a bit, so I would like to make things easier for a while if needed if nipper 2 = expensive rugrat.

Question I have is which one is better to overpay.

Options are:0-

1/ Overpay existing and take Home start. I therefore have the option to stop £92 overpayment at short notice.

2/ Overpay existing by £54 and take capital mortgage. I have option to stop overpayments of £54

3/ Overpay old mortgage by £25 and overpay new capital mortgage by £29. I have the option to stop overpayments of £54 if needed.

I think option 3 as I am paying the mortgage of with the highest rate first? Anyone got any ideas and thoughts?

Thanks

Baz