BTL - 10 year fixed rate - A good idea?

cmonwigan

Currently we have a have a  2 years left on a 5 year fixed rate, BTL mortgage (2.54%)
We will soon have 22 years remaining and £108k left to pay on the mortgage. The house is valued at £180k and is currently tenanted.
We are thinking of taking out a 10 year fixed rate (3.79%, zero fees).
We will have a 2% early redemption fee to pay, which we plan to add to the new mortgage.
The current mortgage is interest only but we have been overpaying £350 pcm to bring  down the principal.
We would continue on interest only.
We plan to keep the house long term and for it to make up a chunk of our retirement income - we are in our mid-50s.
I should add that the house is in my wife's name only,  as I am a higher rate tax payer.
Is the above a sensible plan of action or should we wait and see on interest rates?
Thanks
 

K_S

@cmonwigan If your long-term aim is to retain the BTL property with as small a mortgage as possible (or none), and you expect rates to rise, then it may make sense to consider a 10 year fix at a rate that you're comfortable with and continuing overpaying as much as you can (within the annual penalty-free limit of course) to reduce the capital owed.

From a purely numbers perspective, whether or not what you're considering (paying the 2k ERC, moving to a higher rate 2 years early and fixing for 10 years at 3.8%) will work out to be 'profitable' or depends on which way interest rates move and by how much, so it's anyone's guess.