10 year mortgage mistake!

amnblog

Early redemption penalties are considerable on 10 year deals so don’t expect a cheap way to access lower rates. You can signed up for 10 years of stability and security. Make the most of it and reduce your costs by overpaying within the limits allowed.

bmwmsport

Check with your lender. Explain as you have here. They will give you your options. Remortgaging will cost a premium, BUT if you remortgage with them they MAY waive some. 
Always good to talk

Thrugelmir

bmwmsport said:

Check with your lender. Explain as you have here. They will give you your options. Remortgaging will cost a premium, BUT if you remortgage with them they MAY waive some. 
Always good to talk

ERC's are contractual and rarely waived due to commercial reasons. As it's the lender that loses out financially. 

MFWannabe

Nobli said:

We were going through a really horrible time in January last year and remortgaging was one step too far. I locked in to a 10 year mortgage because I couldn't bear the thought of going through it all again. Now I read that that over the course of 10 years we could be paying £30,000 or more above that of other mortgages. I can't believe I've done this. Even an extra £500 a year to spend on a camping holiday would be a godsend and now to think that I'm wasting approx £3000 a year is unbearable.  Please is there anything that I can do? Should I be looking for a way out of this mortgage?

Was it a bad decision though? What’s your interest rate? What’s the ERC? 

Where have you read that it will cost you £30k more than an average mortgage? What determines an average mortgage. Everyone has different interest rates based on ltv and personal financial circumstances 

No one knows what’s going to happen in the next 10 years, most likely interest rates will rise but no one can say

Nobli

Thank you everyone for your comments. I am always a big worrier.

I can barely remember the situation a year ago. So many things on my mind I cannot even remember if I spoke to a broker. I know I got the mortgage through a broker as I have the paperwork but I have a vague recollection that they asked me if I wanted to speak to someone and I could not find an appointment that worked so just said 'no, I've already chosen.'

I would like to overpay but my partner says that we need to save for emergencies. 

Is there anyone that I can speak to for impartial advice? It seems ridiculous speaking to a financial advisor - aren't they for people who have lots of money? I remember speaking to someone at Nationwide when I was younger and it felt like they gave me impartial advice (although it probably wasn't!). The mortgage is with Coventry. Would they be able to advise me do you think?

Thrugelmir

There's no advice to give. Other than the reassurance that you know your outgoings will be fixed until the 10 year term is up. For most people that's peace of mind in these troubled times. 

What rate of interest are you being charged? 

Coffeekup

I signed up for a 10 year mortgage in November 2018, reason being I wanted to know what I was paying per month also the way it looked at the time the interest rates would/couldn't go much lower, so for me was a no brainer.
My monthly payments are "cheap or what I consider affordable", considering properties either side of me rent out at £200-250 a month (for the same sized property) more than my mortgage payments. 
I also took this with the intention of overpaying, yes I have some gawd awful fee's to pay if I want to change something, but I just wanted stability for a good few year's.

I personally think your partner is right in saving for an emergency fund first, which is what I did for the first 18 months after taking out the mortgage. I now overpay anything from £15-260 pm. 
I've also planned to be mortgage free (or neutral) by the time the term is up, unless a big unforseen financial thing crops up.
Sit back and enjoy the ride best you can, in the meantime play with the overpayment calculator, and tap some numbers into spreadsheets.

EDIT: If I look at the whole term of my mortgage (not the fix rate period)  the interest paid back would be something like 30-40% of what I borrowed. Which is what you maybe are looking at.
However if I stick to my guns and overpay and and aim to be mortgage neutral/free when the fixed term finishes... I'll have paid back about 15-20% interest... Sounds steep and it probably is, however over 10 year's if my number's are correct the loan would cost me an average of £1,500 a year over the 10 year's (total 15k). So in some respects it's not too bad to have a roof over my head, and if I stay on track I'll never have to pay a mortgage or rent again.

[Deleted User]

£3000 a year, £30,000 over 10 years seems near on impossible to imagine given current interest rates. 

Coventry currently offer a 10year fix at 2.55% with £999 fee at 75% ltv.  Their 2 year option would be 1.89% with a £999 fee.  

Even a £500,000 repayment mortgage over 25 years would only cost just over £2000 a year more.   This is a lot of money but also you only have to pay that arrangement fee once rather than every 2 years.   And if you have a mortgage of that size then any increase rate rises are really going to bit quite quickly. 

The only other option is that your rate is horrifically high but if its only from last year I cant see it. 

Are you sure you have your sums correct?  Posting some numbers might allow people to offer some reassurance. 

getmore4less

Nobli said:

Thank you everyone for your comments. I am always a big worrier.

I can barely remember the situation a year ago. So many things on my mind I cannot even remember if I spoke to a broker. I know I got the mortgage through a broker as I have the paperwork but I have a vague recollection that they asked me if I wanted to speak to someone and I could not find an appointment that worked so just said 'no, I've already chosen.'

I would like to overpay but my partner says that we need to save for emergencies. 

Is there anyone that I can speak to for impartial advice? It seems ridiculous speaking to a financial advisor - aren't they for people who have lots of money? I remember speaking to someone at Nationwide when I was younger and it felt like they gave me impartial advice (although it probably wasn't!). The mortgage is with Coventry. Would they be able to advise me do you think?

Put up the details of what you have and people here can go through what you have.

There are brokers that have a good feel for the market and policies,  there are number crunchers than can work through the costings for what you have and some will just say overpay that fixes everything

Where have you got this £30k from as  it seems on the high side for many typical situations.

As you are only in a year in lets start with what you got at the beginning
should all be on the paperwork you have to hand.

Lender(can look up any terms which you may not know)
Amount borrowed
LTV
Interest rate
Full term(we know the fix was 10y)
Payment
ERC terms(% on excess overpayments and when that changes) 

At least then you can understand what you have and when you may need to review. 

Coffeekup

I'm guessing it's the 30k number is from the whole term of the mortgage i.e. 20-25 years.