Moving in the future, what to do with my current remortgage?

Peanut_Player

Hi All,

So my current 2 year fix comes to an end in June so we are looking at remortgaging.  I am looking at both 2 year and 5 year fixes.  Obviously we don't know what will happen with future interest rates.  The problem I have is that I think we will end up moving in 3-5 years.  Our house suits us fine at the minute but when children come along we will definitely need somewhere with more space which will mean moving to a bigger mortgage.

So I'm a bit stuck between fixing for 2 years, hoping interest rates don't rise too much and looking at the lay of the land regards moving in 2 years.  Or fix in for 5 years and then end up paying early repayment charges.  We are looking at mortgages with reducing early repayment charges but I'm still looking at 1-5% depending on the fix year.

This is our first house so I've only bought a house as a FTB, so I'm new to the process of selling/buying while you have a mortgage.  I know I could port my mortgage when I move but then I'm tied in to that lender or you end up with two mortgages for the differing amounts.

If anyone is able to offer advice or thoughts then that would be greatly appreciated.  

greatcrested

Do the maths! Cost of Early Repayment Vs cost of respective mortgages, plus likelihood of moving in 3-5 years.

Peanut_Player

greatcrested said:

Do the maths! Cost of Early Repayment Vs cost of respective mortgages, plus likelihood of moving in 3-5 years.

Sorry for maybe missing the point but of course I have done the maths.  The 2 year fix is around £20 a month cheaper due to the lower interest rate so let's say £500 across the two years.  Plus the fact that in two years I won't have to pay any ERC so the 2 year fix will always work out cheaper.  If I move it 3-4 years I'm looking at about £4k in ERC.  Is fixing for 5 years going to save me nearly £5k, I doubt it with the current state of affairs.  Maybe I've just answered my own question.