Current deal coming to an end

Gam2015

Hi all my current 2 year fixed mortgage deal of 5.20% is coming to an end on the 1st of May on a mortgage balance of £45900. Looking at new rates with current provider is about 3.9% with zero fees on another 2 year fixed if I accept now does the new deal start immediately or will it be 1st of May? I also have max holdings in premium bonds at 50k i have often thought should i just pay mortgage off in full 🤔 my winnings from Jan - December 2025 was around £1800 so i always just think thats paying my mortgage interest but maybe one day i might win a big one 🤞🏼 what would others do in my position? 

Yorkie1

[quote]
Gam2015 said:

Hi all my current 2 year fixed mortgage deal of 5.20% is coming to an end on the 1st of May on a mortgage balance of £45900. Looking at new rates with current provider is about 3.9% with zero fees on another 2 year fixed if I accept now does the new deal start immediately or will it be 1st of May? I also have max holdings in premium bonds at 50k i have often thought should i just pay mortgage off in full 🤔 my winnings from Jan - December 2025 was around £1800 so i always just think thats paying my mortgage interest but maybe one day i might win a big one 🤞🏼 what would others do in my position? [/quote]

You will need to check with your mortgage provider but usually a new product rate will start when the current one is due to expire (1 May).

With that balance, you are wise to avoid products with fees attached.

Can't answer the question about paying off the mortgage in the absence of information about the bigger picture, e.g. emergency funds, higher rate debts, future funding priorities, etc. But 3.9% interest rate on a mortgage is likely to be higher than interest rates on most savings within a year, is my view. 

p0lystring

Best to stay away from mortgages with a product fee

TheLastMongoose

I have a similar size mortgage and I feel as the balance is getting lower it's becoming more of a faff due to limitations on overpayments. My choice would be to pay it off, then use the money you would have used for the mortgage payments to buy more premium bonds to build up your savings again. You will probably save some money and have less admin to do in future as well.

Emmia

p0lystring said:

Best to stay away from mortgages with a product fee

Why?

A fix with a fee, might be cheaper overall than a no fee product for the same period.

You need to work out the total cost of the mortgage including the fee to see if it's good value or not - I'd also always pay the fee upfront, not add it to the mortgage.

kingstreet

Emmia said:

p0lystring said:

Best to stay away from mortgages with a product fee

Why?

A fix with a fee, might be cheaper overall than a no fee product for the same period.

You need to work out the total cost of the mortgage including the fee to see if it's good value or not - I'd also always pay the fee upfront, not add it to the mortgage.

Highly unlikely on that size mortgage. Fee products suit larger mortgages and longer fixed periods.

kingstreet

Gam2015 said:

Hi all my current 2 year fixed mortgage deal of 5.20% is coming to an end on the 1st of May on a mortgage balance of £45900. Looking at new rates with current provider is about 3.9% with zero fees on another 2 year fixed if I accept now does the new deal start immediately or will it be 1st of May? I also have max holdings in premium bonds at 50k i have often thought should i just pay mortgage off in full 🤔 my winnings from Jan - December 2025 was around £1800 so i always just think thats paying my mortgage interest but maybe one day i might win a big one 🤞🏼 what would others do in my position? 

Depends on lender.

EG Halifax - "Where the customer is within the last 3 months of an existing product you can choose to either start the new product from the 1st of the following month and we will waive any Early Repayment Charge OR forward date the new product to start after the current product has ended."

penners324

Me personally, I'd pay the mortgage off from the premium bonds, then take the mortgage payments and put them into a pension.

Assuming you have other reasonable savings