What should I do?

AdmanPea

Hi everyone. So to summarise: 

I have a mortgage on two rates as I ported part over and borrowed on top in April last year to buy a house. The ‘average’ interest rate between the two loans is 2.8%. 

One loan is up for renewal around May 2023 with the other being up at November 2023. My initial plan was to line them up and remortgage in November next year on the best rate possible but with things as they are it would seem I could end up on a horrific rate. I know it’s a bit of guesswork but what would you do? 

Do I get out of my deal early and pay a penalty to remortgage now on the basis it’ll most likely get far worse or stick it out and hope? 

I owe approx 130k on mortgage so it’ll be around 1% of that for both loans so I think the penalty will be around £2600. 

Thanks 

K_S

@admanpea Personally I would consider getting a remortgage offer from a lender that will give 6+3 months or 6+6 months offer validity so that I can avoid ERC on the part ending in May 2023. 

When it comes to May 2023, you can reassess the rate situation and do the numbers to see if you want to complete on the mortgage offer that you have or perhaps get another remortgage offer (or a product transfer with your current lender) that will allow you to avoid ERC on both parts.

It does sound like a bit of a faff but if rates rise a lot in the next 6 months, it can potentially save you a lot of money.

AdmanPea said:

Hi everyone. So to summarise: 

I have a mortgage on two rates as I ported part over and borrowed on top in April last year to buy a house. The ‘average’ interest rate between the two loans is 2.8%. 

One loan is up for renewal around May 2023 with the other being up at November 2023. My initial plan was to line them up and remortgage in November next year on the best rate possible but with things as they are it would seem I could end up on a horrific rate. I know it’s a bit of guesswork but what would you do? 

Do I get out of my deal early and pay a penalty to remortgage now on the basis it’ll most likely get far worse or stick it out and hope? 

I owe approx 130k on mortgage so it’ll be around 1% of that for both loans so I think the penalty will be around £2600. 

Thanks