No more fix as the end is nigh!

louisea64

My fixed rate ends July of this year and I've taken advantage over the last 2 years of making the full 10% overpayment. I will have 4 years remaining.

Bank have now written to reduce my payments so I remain in the 4 years to pay it back. Nice to have that extra money but even nicer to have the whole amount to play with with no mortgage!

So I plan to keep making the same payment I currently pay from August together with an overpayment as I'm no longer tied to the 10% and hope to clear in just under 2 years.

Is this the right approach? 

It is not worth fixing as amount owed is smallish and therefore 10% restriction deems it not worthy.

Thank you in advance for advice.

Brie

Can you not just get the bank to take the same payments as previously so you don't have to fuss? 

Mortgage freedom is lovely btw.

Hoenir

louisea64 said:

So I plan to keep making the same payment I currently pay from August together with an overpayment as I'm no longer tied to the 10% and hope to clear in just under 2 years.

Is this the right approach? 

How does the SVR compare to a 2 year fixed rate ?

louisea64

@Hoenir 6.99 v 4.88. 
@Brie - yes that's a good idea and I can still make the overpayments too

housebuyer143

louisea64 said:

My fixed rate ends July of this year and I've taken advantage over the last 2 years of making the full 10% overpayment. I will have 4 years remaining.

Bank have now written to reduce my payments so I remain in the 4 years to pay it back. Nice to have that extra money but even nicer to have the whole amount to play with with no mortgage!

So I plan to keep making the same payment I currently pay from August together with an overpayment as I'm no longer tied to the 10% and hope to clear in just under 2 years.

Is this the right approach? 

It is not worth fixing as amount owed is smallish and therefore 10% restriction deems it not worthy.

Thank you in advance for advice.

I don't think you should go on SVR, that's a high rate. Why don't you go onto a product with no ERCs so you can just overpay as much as you want.

Failing that, put the money in an ISA or savings account and clear it at the end of the new 2yr term. That has to be better than paying,, 7%

Hoenir

louisea64 said:

@Hoenir 6.99 v 4.88. 

Is there a product fee for the fixed rate? 

louisea64

@Hoenir - no. It's  a 2 year fixed deal at 4.88% with no fee then I would be restricted to the 10% overpayment and in the first year this would only be £2k I could overpay and I plan to pay more than that in year 1, swiftly followed by similar payments in year 2 to clear it.

Bank of mom n dad might step in to clear, then I'd just pay them but I don't want to rely on that happening or put pressure on them to do so.

I have some savings but I need to keep that where it is as that's emergency money and it's not a fortune.

Once mortgage has been cleared that will be the time to concentrate on the saving pot.

Thank you for your advice and thoughts.

penners324

Accord do a 50% overpayment mortgage, others do a no erc mortgage.

As long as the upfront fee is minimal this sounds a good route