To deal or not to deal?

Mazz94

Hi guys, long-time lurker, never posted as wasn't sure how much value I had to add to the forums as a 25 year old with little life experience... But I have a conundrum that I simply cannot get my head around. I wondered if you remarkable people might have some insight, pretty please?

Currently DH is on a 4.24% SVR mortgage, current value ~£42700 with 19 years left to run, LTV 29.8%. He is the only one named on the mortgage and house deeds for a couple of reasons, but mainly as he bought the house before we got together. So as my income isn't considered and my name isn't on the deeds (and likely to stay that way), it would be difficult for him to get a deal for a much shorter period. After June however, between us we'll be able to make £1200 regular overpayments to this, reducing the overall term to closer to just three years from nineteen. :T

I have found a 2 year fixed deal at 1.71% followed by a 1.25% discount off SVR for 3 years. Most importantly, it has zero ERCs meaning we could continue to overpay at the same rate without penalty. I thought this was pretty amazing as fixed rates normally have 10% capital repayment limits?

Now for the conundrum, there is a £999 fee to remortgage.
Over three years, are the savings considerable enough, fees included to switch deals or should we just continue as we are and get it gone regardless of the higher rate?

DH is very.... faff-averse... and despises discussing money and switches, transfers, rates, the general maths side etc at the best of times, but is happy to follow my recommendations if the savings are worth it. I've tried to compare the mortgages with calculators but I cant get my head around the overpayment aspect of it.
How would it compare over 3-4 years rather than the full 19? Obviously over the longer term, switching would be much better than sticking to 4.24% but my head is now officially frazzled.

Please send help :eek:

Thrugelmir

What products does the current lender have on offer? Paying the SVR makes little sense. Likewise the cost of remortgaging might well outweigh any benefits. Exit fees, valuation and legal fees mount up.

Mazz94

Thanks for replying!

Current lender offers us only a 2.26% fixed rate for two years and a 2.46% fixed rate for five years, but each of these have a 10% capital repayment limit, so we'd only be able to overpay £4200 the first year and even less the second..

Would it make sense to do this then? And save the rest of money somewhere to overpay once the fixed rate ends? I worried that we'd be paying more interest during the fixed rate that it would work out more expensive overall? The five year fixed seems out of the question at least?
Plus DH is pretty keen atm to get overpaying without worrying about paying penalties so I feel he'd push harder to overpay more if the unlimited option was there?

Edit: - At the moment, there are no exit fees for the rate we have, and the 1.71% mortgage offered free valuation and "fees assisted legal services", but I wasn't sure what this meant? I know it had a £999 fee.