Coventry flexx for term

SwiftS

I have the Coventry Flexx
for term mortgage. Until earlier this year I had been paying 1.75% interest. Since March it has moved to 1.9%, then 2.05%, then 2.2% and now will be 2.35% from August. I had been making overpayments before the rate went up ( there is no annual 10% limit on overpayments) and luckily I only owe about £45,000 now so the increases in interest rate are less painful. Should I be looking to fix or is the Coventry product likely to remain a good choice? They have only passed on .15% increases each time the rate has increased by .25%. However, as Coventry set their own interest rate on this product they could put it up more in the future. The adviser who recommended the product to me said that Coventry will need to stay competitive as there is no early repayment charge and clients can move when they choose. Wish I’d fixed last year when I could get rates under 2%, but at the time I thought I would continue to make decent overpayments but energy prices and inflation will restrict my ability to do that moving forward. 

In a nutshell should I stay or should I go?

Rafter

Hi SwiftS,

Not sure anyone here can tell you what is going to happen to rates but they look like they will be going up in the near term at least based on what economists are saying and the latest Bank of England reports.   

If you would prefer the certainty then look at a fixed rate,  even if that means a slightly higher payments in the short term.  If you still want the flexibility to make overpayments (of more than 10% per year) you could look at a fixed offset mortgage - but they tend to be a bit more expensive.

Your advisor should be able to tell you what is best - particularly with only £45,000 outstanding, you want to focus on the total cost not just the rate - because up front fees could make the loan more expensive over its life.

Good luck. 

ACG

To remortgage to a fixed rate, you are probably looking at around 3% give or take and there may also be fees involved. 

The reason Coventry are not passing on the full increase is because they do not need to, but as a building society they need to do a certain amount of their lending on a variable rate. So they are trying to keep it competitive. You could find if a lot of people switch they do not even pass on further rate rises. 

Personally if I was you, I would have switched about 4-6 months ago. But as you have not, I think financially it probably makes more sense to stick where you are. The risk of it being worse in the long run is there, but I think its unlikely - but thats my personal opinion rather than professional. 

Professional would be asking about whether or not you are going to struggle if rates keep going up and is it worth fixing to protect you from that struggle. 

K_S

SwiftS said:

I have the Coventry Flexx
for term mortgage. Until earlier this year I had been paying 1.75% interest. Since March it has moved to 1.9%, then 2.05%, then 2.2% and now will be 2.35% from August. I had been making overpayments before the rate went up ( there is no annual 10% limit on overpayments) and luckily I only owe about £45,000 now so the increases in interest rate are less painful. Should I be looking to fix or is the Coventry product likely to remain a good choice? They have only passed on .15% increases each time the rate has increased by .25%. However, as Coventry set their own interest rate on this product they could put it up more in the future. The adviser who recommended the product to me said that Coventry will need to stay competitive as there is no early repayment charge and clients can move when they choose. Wish I’d fixed last year when I could get rates under 2%, but at the time I thought I would continue to make decent overpayments but energy prices and inflation will restrict my ability to do that moving forward. 

In a nutshell should I stay or should I go?

@swifts I can't speak for you but personally, with a relatively small loan size of 45k, currently at less than 1% over the base rate with full flexibility to ditch and switch anytime, I would leave it as it is and keep overpaying as best as I can.