10 year fee lower than 5 year?

Uk1982

Hi all,

We have £68,000 left to pay on our mortgage and a term of 15 years remaining. 

Our 2.69% fixed rate is almost up (we currently pay £528 per month).

Our current lender is offering 5 years fixed term at 5.78%, or 10 years at 5.23%.

The 10 years fixed term would see us paying £534 per month, which is only £6 more than we are currently paying (I can't understand how going from 2.69% to 5.23% would only be an increase of £6???)

It's very unlikely that we'll move home in that time. 

My thoughts are, if going up to 5.23% is only an increase of £6 per month, then conversely if the interest rate dropped extremely low over the next few years then it would still only make a few pounds of difference per month. Therefore we wouldn't be missing out on any crazy savings by fixing for 10 years.

Or have I missed something / completely misunderstood?

la531983

Have you made significant overpayments onto the mortgage that have now taken your minimum payment down as a result? 

Uk1982

We've probably overpaid about £4000 per year for the last two or three years. 

ader42

A £68k mortgage at 5.23% for a 15 year mortgage term should be £450 a month. 

At 2.33% it would be £366 a month. 

Andreg

ader42 said:

A £68k mortgage at 5.23% for a 15 year mortgage term should be £450 a month. 

At 2.33% it would be £366 a month. 

These numbers don't look correct to me.  Using MSE calculator (which agrees with my calculation): https://www.moneysavingexpert.com/mortgages/mortgage-rate-calculator/

A £68k mortgage at 5.23% for 15 year term is £546 per month.
A £68k mortgage at 2.69% for 15 year term is £459 per month.

gjs6385

Could it be because you’re now at the point where you’re mainly repaying your capital rather than interest so the rate doesn’t have much bearing on your monthly payments?  I may be wrong but just a thought.

Neilos9

gjs6385 said:

Could it be because you’re now at the point where you’re mainly repaying your capital rather than interest so the rate doesn’t have much bearing on your monthly payments?  I may be wrong but just a thought.

your wrong.

amnblog

Your figures are all over the place, they do not add up and you need to check again.

Expect to pay +£80 more to go from your current rate to the 10 year rate.

If you are paying £528 a month currently, you are overpaying.

MeteredOut

Neilos9 said:

gjs6385 said:

Could it be because you’re now at the point where you’re mainly repaying your capital rather than interest so the rate doesn’t have much bearing on your monthly payments?  I may be wrong but just a thought.

your wrong.

If you're going to be so blunt to someone, especially when you're telling them they're wrong but not actually helping them, then it is perhaps best to spell things correctly to avoid looking like a fool.

"You're"