Remortgaging Early

BurghleyLife

Hi there, 

Newbie here. 

I’m looking for a bit of reassurance/advice, although I appreciate everything is a bit of a gamble. 

I have my home on a 65% LTV mortgage, which is in two parts, after we ported and then took out additional borrowing when we moved house almost two years ago. 

The smaller part of our mortgage is fixed on 2.44% until 30/06/2023 and the larger part is on 2.04% until 30/12/2023. 

All forecasts are suggesting that the first fix is going to end at the time of peak interest rates. 

We’re looking at £4500 in ERC’s to switch lenders now and fix at just over 4%, adding in some extra savings to keep the monthly payments at around £170 pm more than now. 

The other thing we have considered is waiting it out and then going on a tracker when our first fix ends, hoping the interest rates will come down and the pain of much higher repayments will be short lived. 

Are we best off pushing ahead and trying to get a new fixed mortgage sorted now? 

TIA 

LoomThought

I am in a similar situation like you and I have been monitoring the forum and the market for a while. I can only try to help by advising that if you cannot keep up with payments when mortgage interest rates are 5.5% as a minimum then perhaps you should pay the ERC and fix.

CSL0183

BurghleyLife said:

Hi there, 

Newbie here. 

I’m looking for a bit of reassurance/advice, although I appreciate everything is a bit of a gamble. 

I have my home on a 65% LTV mortgage, which is in two parts, after we ported and then took out additional borrowing when we moved house almost two years ago. 

The smaller part of our mortgage is fixed on 2.44% until 30/06/2023 and the larger part is on 2.04% until 30/12/2023. 

All forecasts are suggesting that the first fix is going to end at the time of peak interest rates. 

We’re looking at £4500 in ERC’s to switch lenders now and fix at just over 4%, adding in some extra savings to keep the monthly payments at around £170 pm more than now. 

The other thing we have considered is waiting it out and then going on a tracker when our first fix ends, hoping the interest rates will come down and the pain of much higher repayments will be short lived. 

Are we best off pushing ahead and trying to get a new fixed mortgage sorted now? 

TIA 

Why can’t you remortgage the first part at 2.44 now as you are in the last year of that deal and your ERC should be 1%. 

Presumably the bigger mortgage is still in the 2% ERC band as that has over a year left to run and that’s the costly one to get out of? 

There’s a benefit of having it in 2 parts, it means you get to split the risk or as you say you can just do both, pay the ERC’s and have peace of mind. 

Nailer99

I’m in a similar situation to yourself. I’m sorry to be a doomsayer but I think we’ve left it too late. Those 5-6% rates are arriving now. Kicking myself for not paying the ERC six months ago. 

Not sure what to do now other than risk it with a Tracker and hope for a change in government. :-(