Desperate for advice

Tom157182

Hello. 

I am desperate for some advice. 

I have 2 mortgages:

Mortgage 1: balance is £69,000. It’s at a rate of 2.59% which is fixed for another 3 years. This costs me £665 a month. 

Mortgage 2: balance is £111,100. It’s at a rate of 11.75% (I know!) it’s fixed for another year and has a term 19 years left. This costs me £1229 a month - but I pay £1500 to add over payments. 

My credit rating is poor which is why the second mortgage is so awful. 

I have found a mortgage broker who can lend me £180,000 at a rate of 5.8% variable - to combine them   

Is this a good idea? I will obviously be sacrificing my 2.59% rate. Any advice is welcome and appreciated. 

I’m not able to get a cheaper rate as my credit rating is so poor. I earn about £130,000 a year with other debts.

Thanks

Tom

Hoenir

What's the early exit penalty on Mortgage 2 ? 

When does the fixed term actually expire ? 

JGB1955

How many years is the 'new' mortgage for?

Tom157182

Mortgage 1 has 3 year fixed left. 7 years left
mortgage 2 has 1 hear fixed. 19 years left. 

The exit fee for the both is £2300
thanks!

Tom157182

The new mortgage would be a 15 year term. 

BikingBud

Tom157182 said:

Hello. 

I am desperate for some advice. 

I have 2 mortgages:

Mortgage 1: balance is £69,000. It’s at a rate of 2.59% which is fixed for another 3 years. This costs me £665 a month. 

Mortgage 2: balance is £111,100. It’s at a rate of 11.75% (I know!) it’s fixed for another year and has a term 19 years left. This costs me £1229 a month - but I pay £1500 to add over payments. 

My credit rating is poor which is why the second mortgage is so awful. 

I have found a mortgage broker who can lend me £180,000 at a rate of 5.8% variable - to combine them   

Is this a good idea? I will obviously be sacrificing my 2.59% rate. Any advice is welcome and appreciated. 

I’m not able to get a cheaper rate as my credit rating is so poor. I earn about £130,000 a year with other debts.

Thanks

Tom

Are they both for the same property?

It would appear that not only do you need to address the mortgages but also, given your mortgage debt to earnings ration £180k v £130k, your overall expenditure and cashflow. Perhaps starting a thread here might assist.

Brie

The mortgage broker is going to lend you the money?  Or they've found a bank that might lend you that?  Or they've found some other source that is willing to take the risk?  

amnblog

Looks to me like your current interest cost is about £14,800 a year and this new offer reduces it to about £10,400.

Therefore interest is down by £4,400 this year but it is costing you £2,300 in early repayment charges (plus, presumably, broker costs, valuation, legal fees)

You are currently on fixed rates and I wonder if it is smart to go to a variable rate. 

Given your mortgage balance v income there must be considerable other debt and can you afford to be on the new rate and find it going up.

When your current fixed rate ends will your credit history be more stable?