Remortgage now or later?

AndyPoll

Hello,

I have a flat that has a 3 yr deal with Virgin Money coming up for renewal in Jan '19.

I would have to pay circa £2500 in an ERC if I were to remortgage now.

I have seen many news reports, experts' opinions etc saying rates will rise at least 1.5 to 2% this year. There are some pretty good BTL mortgage deals out there at the moment that likely won't be there next year if rates rise in 2018.

Do you think it's worth sucking up the ERC and remortgaging now?

Amount for remortgaging is 78k on 220k value.

P.S. I realize this is like astrology really so not looking for certainty, just interested in the general consensus.

Theguywhovapes

You would have to find a deal that’s going to save you £200 per month or more at least, depending on when any remortgage completes.

wombleking

Astrology indeed but a rise of 2% would be a shock, to me anyway.

Thrugelmir

AndyPoll wrote: »

Do you think it's worth sucking up the ERC and remortgaging now?

Not just the ERC to pay. There'll be a mortgage redemption fee, valuation fee and legal fees. Added to which the best rates tend to come with product fees.

With a relatively small balance owing. Your better option might be to overpay the mortgage. That way you are benefiting from the mortgage quicker and reducing your exposure to any future increases in interest rates. Which seem likely. Even if small and slow in nature. As normality is some years away.

juniordoc

I very much doubt there will be more than a 0.75% increase in interest rates over the next 12 months if that.
As mentioned above I would stick with your current deal and overpay as much as you can without penalty. You can start looking at remortgage deals in August/Sept.