Not enough for a mortgage

lizeey

So my mortgage fixed rate is due to end in October, we owe £16,000 so not enough for us to remortgage onto another fixed rate. What’s our best options????

A_Frayed_Knot

Who said/told you this? Never heard of it.

elsien

You might find that as the amount owing gets smaller it's very difficult to remortgage at all because the costs are likely to be too high to make it worthwhile. When I got to that point I overpaid to get rid of it more quickly.

butterflybook

Although that is a small balance it is not out of the question to remortgage on to another fixed rate deal -

kingstreet

A customer retention product from your existing lender?

Can normally be done online with no cost, nor status/affordability checks.

beanielou

kingstreet wrote: »

A customer retention product from your existing lender?

Can normally be done online with no cost, nor status/affordability checks.

Agree with this.
This is what I did.

Zero_Sum

Im with nationwide & they let you remortgage for just a few grand as an existing customer. And give you £100 retainer.

A_Frayed_Knot

elsien wrote: »

You might find that as the amount owing gets smaller . . . .When I got to that point I overpaid to get rid of it more quickly.

This is what I did/am doing.

Low mortgage of £18000 and a new 2 year deal would have just restricted my overpayments far too much, so opted for out of deal and no limit on overpayments.

Downside is interest rate, but that just spurs you on to clear it as quick as you can.

greent

With that small a balance, unless you have a very restricted income, I'd look at staying on SVR for the flexibility of being able to throw as much at it as possible and clear it asap.

Zero_Sum

A_Frayed_Knot wrote: »

This is what I did/am doing.

Low mortgage of £18000 and a new 2 year deal would have just restricted my overpayments far too much, so opted for out of deal and no limit on overpayments.

Downside is interest rate, but that just spurs you on to clear it as quick as you can.

I guess different mortgage providers have different rules, but with Nationwide its based on the original loan. So if you originally took mortgage of £100k & you remortgage for 2 years for £20k you can still overpay upto £10k a year.

Even if the overpayments are restricted would you still not be better off getting a 2 year fix then chucking the overpayments into regular savers instead which will pay more interest than you're charged on mortgage. Which is what i'm doing at the minute.

A_Frayed_Knot

Zero_Sum wrote: »

I guess different mortgage providers have different rules, but with Nationwide its based on the original loan. So if you originally took mortgage of £100k & you remortgage for 2 years for £20k you can still overpay upto £10k a year.
Even if the overpayments are restricted would you still not be better off getting a 2 year fix then chucking the overpayments into regular savers instead which will pay more interest than you're charged on mortgage. Which is what i'm doing at the minute.

Nothing wrong with savers, just not for me - reasons below.

Have managed to do this? as I would have my doubts, (but don't know Nationwide's allowances to o/p) I take the original loan sum to be whatever you have remortgaged for and not the 1st mortgage sum, otherwise they would not have ERC's. I hope you check this out, thoroughly.

With H@lifax, its 10% of your re-mortgage sum, not the original sum from 1st mortgage. So that would have let me o/p £1,800 when in previous years I have managed around double that. Also (most important factor, for me) was the new 2 year deal would have also taken me over my target MF date, which was Dec 2019 (S*d that for a carry on) - I want to be MF asap and I will, I will, I will be, (If I say it often enough, it will happen ) before my next birthday in March:j

Not much difference between mortgage interest rate and regular savers interest, I had a regular saver and got bored - was too slow for me, £200 a month for a year - all for £60 interest, much preferred to see my mortgage balance reduce quickly.