Ditch my fix?

Unicorn_cottage

Best to overpay now (imo - but I know some people will disagree) as your rate is relatively high. Run it through the overpayment calculator and see how much you will save

somethingcorporate

R1G wrote: »

19 months left on the current fix and the LTV is 60.65% house valued £155k.

Somethingscorporate,isn't it best to overpay with a lower rate as it eats into your debt more? If i decide to stick with the current rate i'd look to overpay too.

No. If you can save at 5% (in a regular saver) or save interest at 2% on your mortgage saving is the better idea.


The other way round, if your mortgage is @ 4% and savings only at 2% it makes sense to overpay the mortgage.

Thrugelmir

R1G wrote: »

Somethingscorporate,isn't it best to overpay with a lower rate as it eats into your debt more? If i decide to stick with the current rate i'd look to overpay too.

No. Interest is normally calculated daily on the balance owed and charged monthly. Over time the interest savings compound. Meaning that every month you repay more capital and incur less interest.

Einstein's Theory of Compound Interest. Albert Einstein famously said that compound interest is the most powerful force in the universe. He said, “Compound interest is the 8th wonder of the world. He who understands it, earns it; he who doesn't, pays it.”

getmore4less

Forgot the obvious question.

What has changed to make your choice of a 5y fix then wrong now?