17 months of mortgage left after fixed rate ends

ikr2

Our fixed rate deal ends at the end of 2026. After that we have 17 months left until it is paid off! The fixed rate is 1.29%. The SVR for our lender is 6.54%. So our payments will go up.

After the fixed rate ends, is there any way to get, say a 1 year fix without extending the mortgage term. Or a fix for the remaining term of the mortgage?

All the mortgage comparisons assume whole years for mortgage terms. So I can't put in a 17 month mortgage, I have to put in at least 2 years. And of course extending the term of the mortgage will increase what we have to pay off.

ACG

There are lenders who do 1 year fixes, there are also lenders who do variable rates with no ERCs at better rates than SVR. However, the other issue you may find is many lenders have minimums and then in addition any fees - legals, arrangement fees etc.

Sorry, more problems than answers there.

What will the balance be in 17 months?

On-the-coast

move to a 2 year fix then overpay?

grumpy_codger

So our payments will go up.

Not that much I guess as the remaining balance is pretty small and interest makes a small part of your monthly payments.

move to a 2 year fix then overpay?

Yes, this is a possibility. In my case (Halifax/Lloyds) the penalty is 1% of the balance at the start of the last calendar year - not much.

MWT

https://forums.moneysavingexpert.com/discussion/6655363/17-months-of-mortgage-left-after-fixed-rate-ends

Work out how much will be left on the mortgage at the end of this year then see what that really means in additional interest…

The majority of your repayment at this end of the mortgage is capital and that means the interest component is low and going down each month, you would probably lose more in costs trying to move it than you'd pay by staying on the SVR.

born_again

https://forums.moneysavingexpert.com/discussion/6655363/17-months-of-mortgage-left-after-fixed-rate-ends

Just do a rate switch with you current lender.

ikr2

Thank you for the replies. There will be about £29K left on the mortgage when the fixed deal ends so as @MWT wrote, most of the repayment is capital. Lender's SVR is 6.54% at the moment. I ran that through the mortgage calculators for the 17 months that would be left, against getting a 2 yr fix with the market leading no fee rate (First Direct 3.94% I think) and the 2 yr fix actually saves a little money over the total cost of the mortgage.

I will have to see what interest rates are like in the autumn but that might the way forward: a final 2 yr fix to the end of the mortgage

penners324

Whats the current lender offering?

A variable rate with no erc for 2 years sounds the best option

Archerychick

If you’re considering First Direct is take a 2 year fix, extend the term to 24 months. Over pay each month so you still pay back what you’re paying now (they have unlimited overpaying), then when you get to say 20 months ask them to recalculate your payments, and they’ll spread the little you have left over the last 4 months. Then you avoid the ERC.

However work out the difference in the interest because on the small balance you have left it may not be worth the hassle, and may be simplistic to just take a 1 year fix