End of fixed rate - only 15000 owing but no 12 month deals

SMC0325

My fixed rate mortgage ends in July 2018 and I will have around £15000 left. However at the end if the fixed rate I revert back to the standard rate of over 4% with no 12 month only deals available. Is there a better way to clear the remaining £15000 in 12 months avoiding the 4%

Mortgage_Adviser

With such a small mortgage and short term the monetly diference would be around £23 if yoi wee to cut it by half or so, so personally I would not bother doing anything.

There are a couple of lenders who have a minimum mortgage term as 1 year so if you can find them and they can get you a mortgage fee free, as no point of paying any fees here as these will wipe out any savings.

You may want to try a fee free broker here such as London & Country. Although I would not normally suggest using fee free brokers, agian in your situation any whatsoever fees paid would wipe out any savings.

P.S
L%C will then enjoy their £45 or so comission earned of the case )))

TrickyDicky101

Agreed - it's not worth worrying about if you will only have 12m to maturity.

getmore4less

SMC0325 wrote: »

My fixed rate mortgage ends in July 2018 and I will have around £15000 left. However at the end if the fixed rate I revert back to the standard rate of over 4% with no 12 month only deals available. Is there a better way to clear the remaining £15000 in 12 months avoiding the 4%

You don't say what the full term is but there are a number of options.

If full term is longer than 2 years take a 2 year deal and do max overpayments.

looking at some numbers

£15,000 @ 4% 1year £1,277pm total interest £327
£15,000 @ 1.75% 2years £636pm total interest £275

10% overpayment say £750pm
£15,000 @ 1.75% 2years £750pm total interest £234

if you only have 1y full term

I would look at a 0% CC if there is one with no fee on a BT that would work or look for a 0% purchase card and stick all spending on that using the cash to pay of the mortgage earlier.

if you have say £500pm/£1000pm spends that can go on the CC on top of a normal 1y payment plan.

£15,000 @ 4% 1 year £1,777pm total interest £241
£15,000 @ 4% 1 year £2,277pm total interest £193

if that was at a lower rate say 1.75% £84 interest

What deals does your lender have?
Some have trackers/discount that have unlimited overpayments

SMC0325

Thank you for your responses... full term left is about 2.5 years but the fixed rate ends in July. However I need to clear the balance within 12 months of July as I will then be retiring and need to be mortgage free.... have used up my max 10% overpayments this year, but assume once the fixed rate ends in July I can pay whatever I like to speed it up and get it cleared within a further 12 months?

AnotherJoe

Why do you need to be mortgage free when you retire ?

TrickyDicky101

SMC0325 wrote: »

Thank you for your responses... full term left is about 2.5 years but the fixed rate ends in July. However I need to clear the balance within 12 months of July as I will then be retiring and need to be mortgage free.... have used up my max 10% overpayments this year, but assume once the fixed rate ends in July I can pay whatever I like to speed it up and get it cleared within a further 12 months?

That is highly likely to be true although you should check your mortgage agreement to confirm.

SMC0325

Want to reduce e outgoings each month. To continue mortgage payments would be like paying rent and deplete my avail cash flow from pension

Thrugelmir

SMC0325 wrote: »

but assume once the fixed rate ends in July I can pay whatever I like to speed it up and get it cleared within a further 12 months?

That's the way to do it. Have you any savings to call on?

makemesumdosh

WHAT WILL YOUR EXSISTING LENDER DO FOR YOU.
Only have 2 years 8 months left on mine. looking to remortgage in April.my lender has been more than helpful. Rate coming down, 2 year fix, reduced term of 2 years, 2 months, keeping payments roughly the same, option to overpay by 10%. I can avoid going onto SVR by doing this.

AnotherJoe

SMC0325 wrote: »

Want to reduce e outgoings each month. To continue mortgage payments would be like paying rent and deplete my avail cash flow from pension

But if you could pay it off early before you retired you could just put the money aside you would have used in a relatively high interest account and then pay it down from that money, thus getting the best new deal you can before you retire.