Help with the maths please

Giddypip

Hi

I have 2 mortgages on my property. The property is worth approx £150,000. Mortgage 1 is for £61,156.94 and mortgage 2 is for £8,656.13. Rate of 1.99% fixed for 5 years till July 2023.

Mortgage 1 £379 per month (I pay £500)
Mortgage 2 £75.81 per month (I pay £200)

The total cost of redeeming my current mortgages (including ERC of £1,800 for both mortgages) is £71,693.63

I've been looking at some of these new sub 1% mortgage deals and could possibly get a 0.94% deal fixed for 3 years (arrangement fee £999). 

To borrow £72,000 would cost me £329 per month (I would overpay to either £600 or £700 per month)

Would I save money? Does it make sense or should I stick the fix out till 2023?

getmore4less

Does the ERC drop % at any point from what looks like 2.5% now.

With a 1% drop in rate you can't save 2.5% in the 2 years left on your fix.

K_S

@giddypip With that high an ERC, the low loan-size and a product fee of £999, you'd have to go a lot lower than 0.94% for the ditching to make sense.

You are probably better off hammering away at the overpayments while staying on the current fix.

Giddypip

Thanks for getting back to me and helping  

Giddypip

getmore4less said:

Does the ERC drop % at any point from what looks like 2.5% now.

With a 1% drop in rate you can't save 2.5% in the 2 years left on your fix.

After the first year the ERC is 2% of the amount drawn and stays that way till the fix ends