Mortgage Choices - Remortgaging a Interest Only Part

yellowplum · 12 October at 2:29PM

So for the first time since taking out my mortgage, the product is coming up for renewal and the rate is going up. I’m currently on a 1.83% fixed deal which expires in about 50 days. I’ve never switched from my current building society, mainly because we have two mortgages with them – the second one is on a very low fixed rate for 10 years (it’ll be repaid long before then) and is on repayment, so I’ve just kept everything in one place.

The main mortgage has a balance of around £66k. The options I’ve been offered are:

3.89% fixed – £1,495 fee
3.99% fixed – £995 fee
4.27% fixed – no fee

I’m leaning towards the 4.27% no-fee deal. My logic is that I regularly overpay – usually about 5–7% of the 10% annual allowance – so I’m knocking the capital down faster anyway.

However, I’m also toying with two other options they’ve offered:

4.29% 3-year fixed – no fee
4.63% tracker variable – no fee

I know we’re unlikely to see any rate cuts this year, but I’m wondering if we might get a couple next year. With that in mind, is the tracker worth considering in my situation? Either way I would still overpay and the max is still 10%.