To ditch my fix - what would you do?

dizzyscot

Hi,

I know there may not necessarily be a right or wrong answer to this, and no one has a crystal ball, but I am wondering what others would do in this situation.

I am in a 5 year fix at 3.25% with Coventry which is due to end on 30th September 2019. As of 1st October this year the ERC drops to 1% of the outstanding balance + £125 redemption fee. At this time I will owe approximately £70,000 so would have to pay around £825 to ditch the fix. According to the MSE calculator I would need to get a new rate lower than 2.04% to make this worthwhile. The best rate i can get is 2.09% with HSBC for a 5 year fix, with no fees.

While the MSE calculator implies that it is not worth me switching, I am still thinking of doing it for two reasons. Firstly, if I got a new lower rate I would choose to keep paying the same amount as before every month, meaning that I would actually pay the mortgage off 5 months earlier, thus saving money. Secondly, if I wait until September 2019 to remortgage it is pretty unlikely that I would get a rate as low as 2.09%. I think it might be better to lock in this rate for the next 5 years. I am in the habit of overpaying and think I may well have it paid off in those 5 years (or if unable to due to penalties, have enough money saved to clear it once the 5 years is up).

Is there something that I haven't considered, or does this sound like a good plan? Or would anyone suggest going for a 3 year fix? I'm interested to know others' perspective on this, so any thoughts welcome