Remortgage or not to Remortgage

Damowat316

Hi, with interest rates going up I was wondering whether with 14 months left on a fixed discounted rate (3year discounted at 1.59% with sliding early redemption payments, currently 2%, in 2 months 1% 263K outstanding) would I be better in light of further probable rate rises of looking for a 5 year fix either:
ASAP (best i have seen 1.83% low fee).
Waiting till it hits 1% early redemption charge at the end of August but risking another 0.25+% increase to base rate in the meantime! 
Waiting it out till August 23.
Of course I realise advice will be totally dependant on personnel guesses as to just how high rates will go and if they will then stay there. But my fear is that I might well be in a last chance saloon for sub 2% and that waiting for the full discount period finishes could leave me staining at inxs of 3% which long term may make those redemption fees seem small!
Any opinions welcome

simon_or

Damowat316 said:

Hi, with interest rates going up I was wondering whether with 14 months left on a fixed discounted rate (3year discounted at 1.59% with sliding early redemption payments, currently 2%, in 2 months 1% 263K outstanding) would I be better in light of further probable rate rises of looking for a 5 year fix either:
ASAP (best i have seen 1.83% low fee).

1.83% low-fee 5 year fix?! Where have you seen that? Are you sure it's not a discount or tracker rate?

Damowat316

Through mse comparison tool. Newbury BS, 5 years fixed. Admin/setup £850, whether £850 is low fees I suppose is subjective. 
Obviously another actor affecting if you get this will be your LTV (~60% in my case)

Damowat316

Oops, just checked that, tracker! Doh!  Best offered 2.5% still same question only it already looks bad!

simon_or

Damowat316 said:

Oops, just checked that, tracker! Doh!  Best offered 2.5% still same question only it already looks bad!

2.5%? Are you sure you are eligible?

If it's the AIB one you're talking about it's only for Northern Ireland and if it says 'Green' it usually means high EPC rating required A or B.

Seraphi

Damowat316 said:
But my fear is that I might well be in a last chance saloon for sub 2% and that waiting for the full discount period finishes could leave me staining at inxs of 3% which long term may make those redemption fees seem small!

You've long missed the boat for sub 2% mortgages and pretty much already for sub 3%.

If you don't live in Northern Ireland, the best sub 3% rate currently is 2.73% with Lloyds Bank for 10 years. It's 2.95% for 5 years with Leeds Building society.

www.moneysavingexpert.com/mortgages/best-buys

(Make sure you change the options on the left to remortgages and what you want in terms of mortgage term and type)

This last month has been brutal in terms of rapid rises for mortgages. There were rates less than 2.5% at the beginning of June but they've all since been pulled.

You can apply for a mortgage today that you can start after August so that you only pay 1% for your ERC. You don't have to wait until August. A lot of companies will allow you to apply between 3 to 6 months in advance of when you need the mortgage allowing you to lock in a good rate.

You'll need to do the sums yourself on a spreadsheet I'm afraid to see if it is worth it compared to paying say 0.25 or 0.5% more at the end of your current fixed mortgage rate.

richiez

I'm in pretty much the same boat, but ending November 2023, 270,00 to repay @2.16%. 
I plan to apply for a new 5 year fix this week, which should hopefully be valid until January.  By then I will have moved into the last year so the ERC will drop.
The plan is to overpay 10% this year, then can do another 10% in early Jan, this will reduce the figure the ERC is calculated on by 50k, and will reduce the new mortgage overall
While the best rate I can find is 2.75%, the risk of doing nothing is that inflation continues to increase, the BOE throws in some 0.5-0.75% rises, and we end up with 2 or 3% base rate by the end of the year.  It's possible that in 14 months, you might end up looking at 5% remortgage rates.

Obviously this is all guesswork, and might sound pessimistic, but it costs nothing to secure a rate for 6 months to give yourself options.  If rates don't go up, there's nothing stopping you from doing it again.

As said above, you need to calculate a few different scenarios of rates/costs etc and balance that against your risk comfort. 

Yorkshire_lad

Same boat but I will only have 1 month ERC. Aiming to fix with Lloyds. Can't decide between a 5 or 10 year fix...

london21

Depends if you might be moving or selling in the next 10 years.

I would go for 5 years, hate paying ERC.

When I saw the earlier rates, was certain it would be variable.

Fixed looking like 3%+ nowadays.