need advice on whether to switch to repayment mortgage

Denis222

All the replies so far were very helpful, but getmore4less I never expected such a detail analysis! Many thanks and very much appreciated. You have given me a lot to consider and I need to digest this with my slow-in-finance brain!
If I find that I need clarification on something that you have written I will message you to ask. I hope you don't mind, and please just ignore it if you do!
Thanks again.
Denis 

getmore4less

One thing I forgot to ask,
that deal the FA proposed which lender and how long is that fix?

If it is a 5y we can do a simple check over the 5years with the same payment

getmore4less

realized I can just do it anyway 

starting with the proposal(are there any fees for taking that deal? they will make a difference)

after 5 years

amount	rate	payment	owing	interest
£178,000.00	2.39%	£1,669.12	£94,306.16	£16,453.09

The previous post I used the same payment(£1,669.12) and that 5y RBS rate with the £995 fee(works out cheaper than the no fee

This is a slight variation on the previous numbers as I used a mortgage payment that would pay off the fee in 5 years and I did not acount for the surplus of the last payment on the loan.

the IO mortgage on £125,995  £156.45  leaving  £1,512.67 for the loan.
3y 3months there is ~£360 left.

amount	rate	payment	owing	interest
£53,000.00	6.90%	£1,512.67	£359.82	£6,353.95

and the mortgage will still be at £125,995 paying I/O using the surplus(£1512.67 - 359.82) of the 3y4month loan payment the mortgage starts its next 1y8m at £124,842 with the full £1,669.12

amount	rate	payment	owing	interest
£124,842.00	1.49%	£1,669.12	£94,199.96	£2,740.36

At the 5y point as you can see there won't be a lot in it for the same layout every month
(these are a guide the actual numbers will be around this and there is the issue of maxing out overpayments but with low rate and and a 10% limit you can get close)



Any fees with the new proposal and you could be worse off taking that deal over just taking a cheap IO and smashing the loans with everything you have.

Given one of your main objectives it to retain some flexibility using the IO mortgage I would think carefully before giving that up as once gone getting it back could not be that easy as some have suggested.

Going to be interesting what your advisor thinks or if they can come up with something better

Denis222

Many thanks! The FA is from Clydesdale bank so obviously he was keen to pull me out of RBS. I can see that RBS has better rates although there seems to be more variety in CB. The point you made (no way back if I switch) is exactly what concerns me. Again, I will study your analysis this weekend and if you don't mind may message you if anything wasn't clear to me. Again many thanks, I really appreciate the time you put to provide me with such a detailed answer.