Mortgage renewa - wait until post Brexit?

SouthLondonUser

mwarby wrote: »

Ok but b is £240 extra in monthly repayments over the 2 years, with £0 fee, a is £999 fee. Option b would be £759 cheaper over the 2 years

With option B, the total outgoings over 2 years are £759 less. This doesn't necessarily make it cheaper; don't confuse outgoings with cost. The real cost of a mortgage is interest and fees, not principal repayment, which is money you are repaying to yourself. A mortgage can have higher outgoings but be cheaper if it repays more principal and charges less in interest.

See my other post here: https://forums.moneysavingexpert.com/discussion/comment/75498281#Comment_75498281

OP, how much are you borrowing and for how long? Option B will be cheaper than A over the two-year fixed period if you are borrowing less than ca. £250k. The way to calculate this approximation is that, with B, you are paying 0.20% more per year but don't pay £999 upfront, so B is cheaper when:
0.20% *2 * x < £ 999
x < £ 999 / 0.40%
x< £ 249,750

This is an approximation because this calculation holds for interest only mortgages; yours isn't, so the full calculation would need to take into account the amortisation of the loans, but you haven't said how much you are borrowing and for how long.

Thrugelmir

patch9495 wrote: »

Hi Danni,


Depends on how long you are looking at keeping this house.


Most people are recommending locking in at a low rate for as long as possible, due to rates being at their lowest in decades.


This being said ERC come into effect with longer deals, so if its a short term solution lock in for a shorter term, long term solution longer term.
Also take into account stamp duty/legal fees/arrangement fees if you were to move short term.


To offer a bit of perspective we have locked in for 5 years on our FTB as rates are low and we are currently easily accessible to our work (both current and future). Only reason we didn't go for 10 years is due to the high ERC charges if something major were to occur eg offered a job in a different part of the country

Vast majority of mortgage can be ported, subject to the lenders criteria at the time of application. That eventuality is adequate for the majority of people. If you work in a sector where job transfer is likely, i.e. NHS. Then porting a mortgage isn't an issue.