Remortgage or Wait?

millie_chops

Hello everyone

My current deal expires June 2023. I’m on a fixed rate of 2.19 with Coventry Building Society. I would have an ERC of around £600 and I believe some kind of completion fee of around £200 if I was to remortgage. 

Current balance is around £58k. I also have around £10-£15k I could use towards the mortgage. Property is worth around £320k. So LTV quite low

Just wondered if you think I should remortgage now or hold until June 2023? 

The general consensus is that the rates are going to climb so thinking it may be a good time to secure a rate now. I’d probably look for a 5 or 7 year mortgage. 

So hold or remortgage? Any opinions appreciated.

Thanks

london21

You will have to compare the figures.

The rates now vs the new rate.

The savings vs the costs.

millie_chops

Thanks for replying. Appreciate it. I’m not too worried about the (The rates now vs the new rate. The savings vs the costs.) for the difference between now and June 2023. More to do with what the rate could be come time for renewal next year and whether it would be better fixing now? Don’t know if that makes sense? Will definitely cost me over over the next year but is it worth it to get a rate now and secure it or wait until closer to the current deal expiring. Thanks again. 

Salsa16

We have the same dilemma, our fixed rate ends at the end of June 2023.   You could lock into a new remortgage deal now, you will a have a few months to make a decision? I've done this with our mortgage provider today and we have four months to return the paper work.  This means we've time to make our decision and see what happens with interest rates.  Good luck with whatever you decide.

[Deleted User]

Difficult to know what rates would be next year.
Your balance isn't much.

dimbo61

Have you made any overpayments on the mortgage ?
Most allow 10% each year.
So you could pay off £5,800 today and same again when your current deal runs out.
Owing £46/47,000 would mean Interest rates become even less important.
All depends on your circumstances ?

millie_chops

Thanks. Yeah, already overpaid 10%. I’m fortunate that the balance is fairly low. Will probably just leave as is and see what’s available at the beginning of 2023. Thanks for the replies everyone 

laura_louise

I'm also with Coventry, my fix ends in December. They allow you to lock in a new fix 3 months ahead (for me this is September 1st). I have been debating what to do for a few months now because of the ERC, even phoned them up and spoke to them and had all the figures given to me...

... I decided to wait it out. Think I made the wrong decision, I could have got a 10 year fix and that seems to have disappeared from their website entirely now, not before they increased the rates on it by 0.5% despite a 0.25% base rate rise this month. 

Bracing myself for impact come September 1st, I really feel it's too late now for me to consider paying the ERC with it being 3 months away. I can afford to pay whatever it is but, the ERC would have definitely been worth it for me to take  couple of months ago. Tough call to make either way, it's been doing my head in. I don't think anyone can give an answer about what should be done and professionals will only tell you the figures based on the here and now and suggest that it's not a good idea to pay the ERC only to be moved to a higher rate. 

K_S

laura_louise said:

I'm also with Coventry, my fix ends in December. They allow you to lock in a new fix 3 months ahead (for me this is September 1st). I have been debating what to do for a few months now because of the ERC, even phoned them up and spoke to them and had all the figures given to me...

... I decided to wait it out. Think I made the wrong decision, I could have got a 10 year fix and that seems to have disappeared from their website entirely now, not before they increased the rates on it by 0.5% despite a 0.25% base rate rise this month. 

Bracing myself for impact come September 1st, I really feel it's too late now for me to consider paying the ERC with it being 3 months away. I can afford to pay whatever it is but, the ERC would have definitely been worth it for me to take  couple of months ago. Tough call to make either way, it's been doing my head in. I don't think anyone can give an answer about what should be done and professionals will only tell you the figures based on the here and now and suggest that it's not a good idea to pay the ERC only to be moved to a higher rate. 

@laura_louise Given that you're less than 6 months away from the end of your fix, to hedge your bets, you could potentially get a remortgage offer from another lender now, so the rate is secured. Most remortgage offers will be valid for around 6 months.

And on Sep 1, you can compare the Coventry switch rate to the remo rate and make a decision on whether to complete on the remo or stay with Coventry.

LeeLondon_3

We're in a similar position and have two mortgage accounts with HSBC:

Mortgage 1: 159.5k. 1.79%. Ends Feb 2023
Mortgage 2: 278k. 1.84%. Ends Sept 2022

I have a mortgage offer for 2.64% on each account which I got before the last rate rise to remortgage both which is valid until 28th June. 

So I can either accept that and pay the early repayment fees to lock in 2.64% or wait.

From 3rd July I can set up the remortgage on Mortgage 2. This would mean no early repayment charge of £730. but at an interest rate of 2.94%.  I'm thinking that it would be worth paying the early repayment charge of £730 for the lower interest rate as over the 5 years the additional interest would be £4k. 

I'd like to also renew Mortgage 1 at the same time so that they have the same end date. The early repayment charge on mortgage 2 will be £1k but again, give that interest rates may be even higher for February 2023 I'm inclined to also pay this to lock in 2.64% interest for 5 years. This would also mean that both mortgages have a fixed term at 2.64% that ends Oct 2027.