Mortgage renegotiation

danielle83

Hi all,
I am a first time buyer and had a 2 year fixed rate with 2.42% interest until the end of November 2020. I am looking to find a new fixed rate and the rate for my current provider was 1.55 fixed until 2024 however the rates have now gone up to 1.94% interest rate for the same period.

What I can’t seem to work out is whether it is worth transferring to another provider as some deals advertised are 1.2 % however have product fees over £1000. How do I work this out? I have over £50,000 mortgage left. Also, if I do pay to transfer to a new deal for 2 years, surely then I would have to pay again to transfer after this deal elapses and they offer me the APRC rate of 4%? I also wish to pay more / month than I currently do pay - do deals advertised have scope for this as those advertised are roughly £230/month. Any help would be greatly appreciated.
Many thanks in advance,
Danielle

foxy-stoat

You can use one of the online mortgage comparison tools to see if paying the £1000 works for you, adding the £1000 to the mortgage or just staying where you are and go on the existing lenders new fixed rate.

At £50,000 mortgage with low interest rates thought I doubt that paying for a couple of 0.2% rate reduction isn't going to be worth while as your numbers are fairly low.

kingstreet

Don't forget to take into account the difference in how much will be left outstanding at the end of the fixed rate period. It's not just about the fees and monthly costs.

danielle83

Thanks both really appreciate it. Do you think it’s worth leaving it until end of Oct / mid November to see if interest rates reduce? My current provider’s rates increased as mentioned. Understand they are constantly subject to change but do you think it is likely they’ll go down again? 

Thanks again 

dimbo61

No they won't drop 
Pandemic, second lockdown, Brexit, World economy worries !
If anything they might go higher.
Why did you not apply when the 4 year deal was 1.55% ?
Of course you can overpay each month or annually.
Most fixed rate deals allow 10% overpayments. 
You can check by going on your current lenders website and reading about Overpayments. 
You have missed out and paying £1,000 fee to move lender when you owe £50,000 is madness