Mortgage Advice - Fixed Rate or SVR

Mjmollo

I was hoping for some guidance on the best approach to my need to remortgage in March 2025.

• I'm in a fortunate position that come the end of March, I will have a mortgage of around £25k remaining.
• My current job provides me with various incentive plans that are very generous and could potentially enable me to pay off my mortgage by March 2026.
• I understand the minimum fixed mortgage term is 2 years.

I'm trying to determine whether it would be better to fix for 2 years and secure a better interest rate, or, remain with my current lender (Halifax) and transition on to their SVR which doesn't have any restrictions on overpayments.

Does anyone have any thoughts/perspective on this?

Many thanks

ACG

Some lenders offer variable rates, cheaper than svr but with no tie in. 
You could also do an offset mortgage potentially. 

Failing that, do the sums and see if one is significantly cheaper than the other taking into account the ERCs on £25k its only going to be aboue £250 so not horrendous. 

Mark_d

Whilst you could pay off your mortgage next year, why not leave it an extra year.  Pay 4% on your mortgage whilst earning 5% in a tax free savings account.  So let's assume you're going to pay off the mortgage in 2026.

If you take a 2yr fix/tracker, you might get a low rate of 4% but you'll have to pay a booking fee of £1000 for the new fixed rate.  The cost of the 4% interest plus fee, over the next two years, might be greater than what you pay on the SVR for the next two years.  This is a case for a spreadsheet calculation using the correct figures.

El_Torro

What is the SVR with your current lender?

You can also get a mortgage with no restrictions on how much you overpay. These generally come with a product fee, though that might be cheaper than paying the SVR. 

amnblog

Your two year fix offering with Halifax is likely to be 4.93% to 31/01/2027.

SVR is 8.49% which will cost you perhaps £900 extra next year if you do not take the fixed rate.

Take the rate and pay off in full in March 2025 and it will cost you £250.

The maths suggest it is a no brainier.

Jemma01

I think the tracker rate with Halifax was around the 5.54% for my situation before the last two drops in rate (so it should be lower now), you'd still be able to pay it off with no restrictions.
Obviously what they lend you depends entirely on your situation, so have a look around if you want to pay it off asap.

Problem is that it is difficult to assume whether or not a savings account will maintain a good value or not, and same goes for whether BoE rate will go up or down in the next year.

Mjmollo

Thank you to everyone for their thoughts and guidance. It’s made me think about things I hadn’t considered.

I really appreciate all of the expertise!