Remortgaging on deal that expires in March 2027

FataVerde

Hi, I noticed that the remortgage rates have jumped up by at least 1% with the war on Iran. My current, very sweet deal, taken before Sept 2022, is expiring in March 2027. How far ahead of the expiration date should I start remortgaging? I'd normally start 6 months ahead as the MSE guide suggests, but I am hoping against hope that if this conflict calms down, rates would go down. How long does the paperwork itself take?

I also intend to do two overpayments at 10% of the mortgaged sum in 2026 and 2027. Normally, I would ask for the overpayment to shorten the payment term rather than the rate. However, if the remortgage rate I get is higher due to global instability, does it make sense to overpay to just reduce the amount I am paying interest on during the period of the high percentage mortgage deal?

Finally, if it looks like a bad deal, should I only fix for 2 years? My first fix was for 5 years and it's obviously better because you avoid the remortgage fee for another 5 years.

ACG

Your thinking way too far ahead.

Anything more than 3-4 months before the end date is probably a little excessive. That gives you 8-11 months, a LOT can change in that time and probably will.

We are doing more variable rates at the moment than fixed rates believe it or not. Once people understand variable rates they seem to be more open to them. But I suppose that is one of the benefits of a broker, we can discuss everything in detail, answer questions and help you make an informed decision (sorry, I am not trying to promote brokers).

FataVerde

https://forums.moneysavingexpert.com/discussion/comment/81958691#Comment_81958691

It makes sense. However, my current bank's variable rate is 7.2% whereas I can get a 4.7% fixed rate atm. I will miss my current 1.3% rate ;) A LOT

ACG

https://forums.moneysavingexpert.com/discussion/comment/81958704#Comment_81958704

I think your looking at the standard variable rate.

Thats not the same as a variable rate product.

born_again

Why jump now, when could all change in 6 months.

You are on 1.3% for another 11 months, why lose that & pay more on a 4.7% deal?

FataVerde

https://forums.moneysavingexpert.com/discussion/comment/81958709#Comment_81958709

Is a variable rate product a tracker mortgage that varies based on the Bank of England rate? Searching for tracker mortgages did give me better rates and definitely lower set up fees.

ACG

Sort of. It can track the bank of england base rate, it might also track the lenders standard variable rate. It depends on the lender.