Remortgage or not

scottish_lass

We have a £86000 still on mortgage property value at £160000 now on 2.75% interest rate (rate is 2% +base rate 0.75). Have 13 years to pay now wondering if a 10 year fixed rate with some overpayment would be better option? Current lender on 10 yr fixed 2.44% would only be £10 less than we pay now. Difficult to decide with Brexit scaremongering would it be safer to lock in rate??

Thrugelmir

How much do value peace of mind?

Does the product carry a fee?

What alternatives do you have?

Any number of factors could change interest rates. Brexit is one. Scottish independence another. Even a Corbyn Government. Best to focus on events over which you have control. Anything else you just have to get on with.

scottish_lass

Thanks, think it’s more peace of mind if interest rates increase would look for better deal but thought that if we could pay it of within 10 year period it might be better to fix for longer. Coincide with retirement ��

Thrugelmir

As your mortgage balance reduces then any potential saving is going to get smaller. Particularly if you are making overpayments. Interest rates can only fall so low. As lenders have to make sufficient margin to remain in business.

Go with your gut instinct as to what's right for you would be my personal advice. More important things in life to be concerned with as the years pass. Make the decision as part of your early stage retirement planning.

getmore4less

Don't get fooled by the fixing is the low risk option.

Fixing changes the risks and you need to look at both sides to make any assessment.

£86k on £160k LTV 54% LTV.

Base+2% and 2.44% are quite high
Don't forget to factor fees.

which lender? Nationwide?

With overpayments that protects from rises later on.


looking at nationwide options on your 13y term.
(checked and the no fee options are best)

After 5 and 10 years paying the same as the current mortgage

£86,000 2.75% £657pm £56,454 £22,558
£86,000 2.44% £657pm £55,267 £20,550

If you looked at 2x5y deals.

left after 5 years
£86,000 1.74% £657pm £52,657


to match the 10y fix the next 5 ye fix would be
£52,657 3.91% £657pm £20,547

By taking the 10y fix you are not betting that rates will go up but they will go up by more than 2.17%


if you are aiming for 10y to clear the mortgage the numbers become

£86,000 2.44% £808pm £45,641 £51
£86,000 1.74% £808pm £43,198
£43,198 4.67% £808pm £46

if they did not move at all(they could go down but not a lot)
10y 2.44% interest £11,011
10y 1.74% interest £5,678

That 10 fix could cost up to £5333 to protect against rate rises going over 2.93%

if they went up more what would it cost. starting at 3% and going up by 0.25%
£43,198 4.74% £808pm £139
£43,198 4.99% £808pm £476
£43,198 5.24% £808pm £818
£43,198 5.49% £808pm £1166
£43,198 5.74% £808pm £1520

Conmac77

Hi,

Currently on a flexible tracker with Santander with just under 4 yrs to go. Should I look at offers out there or hold?

[Deleted User]

Based on the information you've given, definitely one or the other.