Santander Mortgage

Johnb38

Hi, 

I am looking for some help please. My wife and I currently have a mortgage with Santander; the mortgage is split into 2 parts:

Part 1 - £100k loan balance, on a 5 year fixed rate of 1.79% until 2nd January 2023, ERC of £5k. 

Part 2 - £172k loan balance, on a 2 year fixed rate of 1.43% until 2nd July 2023, ERC of £5k. 

The remaining term on each is 32 years. Property value is between £430 - 450k) 

As the fixed rate in Part 1 of our mortgage ends in just over 4 months, Santander are offering us a 2 / 3 / 5 / 7 year fixed rate all at 3.54% with no product fee. They are also offering a 2-year tracker at 3.19%. 

We are kicking ourselves that we did not fix for longer when we moved into our new home in May last year. The main driver was that we knew our 5-year fix would be ending in Jan 23, so we thought we would opt for a 2-year fix on the new borrowing to coincide with the ending of our 5-year fix, with a view to combining both parts of the mortgage together. We know now we should have sought professional advice instead of managing the re-mortgage ourselves directly with Santander. 

We are tempted to renew Part 1 with the offer of the 2 year fixed at 3.54% (which would increase our mortgage payment from £900 to £993). We are worried about what the interest rates will be in March / April next year when we are able to look at switching the mortgage product on Part 2 of our mortgage, that it might increase our monthly payments by another few hundred pounds or more.

Does anyone have any advice as to whether we should tie into a new fixed rate and for how long? Should we stick with Santander or should we do nothing until around February time next year and look for another mortgage lender (knowing a mortgage offer would last 6 months), who we could potentially re-mortgage to in July next year. 

Many thanks in advance.

Johnb38

Any help would be very much appreciated, thank you.