1 year & 9 months left on mortgage and fixed rate coming to an end

NZPavlova

Hello Everybody. My Halifax mortgage has 19 months left. Our fixed rate ended this month so from 1st August we move to the variable interest rate of 3.59%. Our payments will rise from £2,320 to £2,465. At the end of the last fix period I was told I could only fix for a max of 2 years and it would be the last fixed deal they could offer me as 2 years was the minimum period. However, they also moving to the variable rate at the end of the fixed deal wouldn't have much impact. I have calculated that we will pay an additional £2,755 in interest over this period. I am waiting a call back from them to find out is there is anything they can do. Does anybody know of any 1 year fixed deals? We are also contemplating going for a remortgage to extend the term of the mortgage to 2 years and get a fixed deal. However, most most product fees look to be about 1k. We have £45,627 outstanding on a house worth around £350,000.

Petriix

Surely you should just remortgage for longer? 

amnblog

No deals under 26 months from Halifax

ddonq1412

remortgage to the smallest term you can get and overpay if possible to shorten the length again. you will still be allow to overpay by 10% and that will bring own the interest you owe each month. that will help to offset the cost off product fee surely. i think there is some bank dont charge to prod fees on 2 year fix terms. and the settlement amount is about 30grand, some even offer to pay your fees to switch to them

getmore4less

edit to fix number 
used   http://www.whatsthecost.com/mortgage.aspx

On that rate(3.59%, balance(£45627) and payment(£2465) the interest is a touch under £1,400 over  20 months

1.5% 2 years will be about £1930pm and £720 interest. 

Less with overpayments. 

Petriix

If you switch to a 5 year Nationwide mortgage at 1.64% with no fee and overpay the maximum 10% per year, your total interest will be under £1500. Your regular payment would go down to under £800 per month. However, Halifax should be able to extend the term to 2 years and then offer you a 2 year fix and you'd pay less interest.

Petriix

But your calculations are way off, you'll only pay about £1400 interest in total on your current deal at 3.59%. 

NZPavlova

Thanks for your suggestions everybody. I'll see what the Halifax say about extending to 2 years when they do the call back and if I don't get anywhere. My calculations were based upon what the new monthly payment would be. £2,465.83 as opposed to what we now paying now (£2,320.88) which is an increase of £145 in payment per month x 19 months = £2,755. This must be the result of the interest increase or the payment wouldn't have increased by £145? This month, the interest part of our mortgage payment was £77, last month £81. It has been really nice watching this figure going down over the years! Our current fix is 1.99%.

Grumpy_chap

NZPavlova said:

mortgage has 19 months left.
from 1st August we move to the variable interest rate of 3.59%.
Our payments will rise from £2,320 to £2,465.
We have £45,627 outstanding .

Something seems not quite right in these figures - were you under-paying before?
For such a short term, you can ignore the 'repayment' effect of all interest to start and all repayment at the end.  For practical basis treat it as flat repayments.
To repay £45,627 in 19 months is £2,401 per month with zero interest, so the £2,320 was never enough.  At repayments of £2,465, that is interest each month of £64.  Over 19 months, that makes £1,159 in total interest.

Also, there is a discrepancy between the thread title "1 year and 9 months left" and the OP "19 months left". 
1 year and 9 months = 21 months.  
19 months = 1 year and 7 months.

getmore4less

I got it wrong above will go back and fix.

1y 9m full term

amount	rate	payment	owing	interest
£45,627.00	3.59%	£2,244.93	-£0.00	£1,516.46

1y 7m full term (closer for the £2,465 payment)

amount	rate	payment	owing	interest
£45,627.00	3.59%	£2,473.91	-£0.00	£1,377.24

 at the old rate of 1.99% £2,320 that would be 1y 8m

amount	rate	payment	owing	interest
£45,627.00	1.99%	£2,321.28	£0.00	£798.65

it is really important to do use the same terms as just changing by one has a big impact on the payment ~£100pm  not much on the total interest ~ £70 over term
using 3.59% and  1y 8m your new payment would be £2,354

amount	rate	payment	owing	interest
£45,627.00	3.59%	£2,353.69	-£0.00	£1,446.82

You are looking at around £650 more than you would pay if you stayed on the current 1.99% rate.

getmore4less

if you can go to 2 years the no fee rate is 1.5%
1y 8m

amount	rate	payment	owing	interest
£45,627.00	1.50%	£2,311.41	£0.00	£601.22

with over payments/shorter term saves a bit.
1y 7m

amount	rate	payment	owing	interest
£45,627.00	1.50%	£2,431.55	£0.00	£572.47