Remortgaging & Help to buy loan query

FWB

Happy Sunday everyone

Just looking on abit of advice from people of this forum as I've seen some good replies in regards to this popular subject!

Basically, myself and my girlfriend are 1 year into our 2 year fixed mortgage period with the following details to help you paint the picture:

• Mortgage value: £145,000
• Mortgage LTV: 75%
• Mortgage loan- £108,750
• Terms- 2 year fixed at 1.85% upping to 5.44% variable once the current product has lapsed.
• Monthly repayment- £395 minimum (currently overpaying £500)
• Help to buy equity Loan- £29,000 (20%)
• Remaining 5% paid by deposit
  • Joint annual income- £43,000
  
  Like a lot of people, we're at a crossroads with our next steps. We're wondering whether we're better off down the route of making larger overpayments on the mortgage while we still leave 4 years interest free on our HTB equity loan, thus increasing our equity in the property when we come to remortgage at the end of interest free period and encompassing the HTB loan with the mortgage.
  
  OR
  
  Saving the money up and paying the HTB loan at the end of the interest free period and carrying on as normal (assuming the price of the property hasn't skyrocketed in this period, unlikely but not impossible).
  
  My only issue is that we really need to remortgage in a years time in order to avoid the silly jump of 1.85% to 5.44% variable so I'd ideally like to know whether encompassing the HTB in our remortgage terms would be more beneficial for us.
  
  Thanks in advance for your help!

Thrugelmir

You need to remortgage in a years time. As there's also the option of simply selecting a new product from your existing lender.

If you cannot beat the interest rate that you are paying on your mortgage. Then saving doesn't make sense.

Personally I'd opt for remortgaging at the end of the HTB term.

FWB

Thanks for the quick reply Thrugelmir, in the meantime would you personally opt for upping my overpayments on the current mortgage?

Thrugelmir

Personnally yes I would overpay. While "investing" may potentially provide a better long term return. Being mortgage free is a worthwhile goal for the security and stress free life it provides. For all of us the future is uncertain. Events could impact us financially at any time.

FWB

Yeah, that makes a lot of sense and I was leaning towards the overpayment path as opposed to saving and clearing the HTB loan at the end of the interest free period for that very reason of uncertainty. Thanks for your help!