We’d like to remind Forumites to please avoid political debate on the Forum.
This is to keep it a safe and useful space for MoneySaving discussions. Threads that are – or become – political in nature may be removed in line with the Forum’s rules. Thank you for your understanding.
📨 Have you signed up to the Forum's new Email Digest yet? Get a selection of trending threads sent straight to your inbox daily, weekly or monthly!
The Forum now has a brand new text editor, adding a bunch of handy features to use when creating posts. Read more in our how-to guide
Paying off a Lump Sum?
betsybleu
Posts: 19 Forumite
I currently have an interest only mortgage of £46,000 which matures in 12 months time.
I'm undecided if I should pay off a lump sum now using savings as my mortgage rate is 6.45%, not dissimilar to what I'd achieve in a savings account.
Or wait until nearer maturity and re-mortgage hopefully to a better fixed rate deal by June 24, which will release necessary equity to carry out planned maintenance
Or I could look to re-mortgage now but taking into account fees, the fixed deals around don't seem much better than what I'm currently on.
Any thoughts on the best way forward as I can't see that any would be more advantageous.
Thanks
I'm undecided if I should pay off a lump sum now using savings as my mortgage rate is 6.45%, not dissimilar to what I'd achieve in a savings account.
Or wait until nearer maturity and re-mortgage hopefully to a better fixed rate deal by June 24, which will release necessary equity to carry out planned maintenance
Or I could look to re-mortgage now but taking into account fees, the fixed deals around don't seem much better than what I'm currently on.
Any thoughts on the best way forward as I can't see that any would be more advantageous.
Thanks
0
Comments
-
@betsybleu Assuming that you have no ERC, it's hard to say what will work out better financially in hindsight as that depends on where mortgage rates are in 6-12m time compared to today (it could be lower, higher or the same) and what kind of products are available to you now Vs then.
If you're planning to release cash when you remortgage, and it's important to you that you're able to release cash, then I don't see the point of overpaying a lump-sum now. That way at least you have some protection against not being able to do a capital raise remortgage for whatever reason.
If a capital raise is important to you at remortgage time, and there's no ERC to remortgage now, then I would suggest finding out now whether you can borrow what you need and what the cost is.betsybleu said:I currently have an interest only mortgage of £46,000 which matures in 12 months time.
I'm undecided if I should pay off a lump sum now using savings as my mortgage rate is 6.45%, not dissimilar to what I'd achieve in a savings account.
Or wait until nearer maturity and re-mortgage hopefully to a better fixed rate deal by June 24, which will release necessary equity to carry out planned maintenance
Or I could look to re-mortgage now but taking into account fees, the fixed deals around don't seem much better than what I'm currently on.
Any thoughts on the best way forward as I can't see that any would be more advantageous.
ThanksI am a Mortgage Adviser - You should note that this site doesn't check my status as a mortgage adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
PLEASE DO NOT SEND PMs asking for one-to-one-advice, or representation.
0
Confirm your email address to Create Threads and Reply
Categories
- All Categories
- 353.9K Banking & Borrowing
- 254.3K Reduce Debt & Boost Income
- 455.2K Spending & Discounts
- 246.9K Work, Benefits & Business
- 603.5K Mortgages, Homes & Bills
- 178.3K Life & Family
- 261K Travel & Transport
- 1.5M Hobbies & Leisure
- 16K Discuss & Feedback
- 37.7K Read-Only Boards