Help - fixed rate ending!

never_too_late_2

NB - this Q was posted on mortgage-free-wannabee and was advised to try here. Hoping someone can help.

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Be warned - it's failry long and slightly complicated!

Dear All,

I hope this is the right place to be posting this. DH and I have an outstanding mortgage of approx 121,500 GBP which from 1st June 2008 is no longer on the fixed rate of 5.39%. This means it will revert to the SVR of 7.49%.

In short, our monthly payments will go from 785 to 932. The change in amount isn't so bad cos currently we overpaid and comfortably afforded 900 per month. So that's not really my worry.

I know the most sensible thing to do is change mortgage provider for a better rate, however:

1. If we move before Dec 2008, we have to pay back 1,000 GBP cashback to current mortgage provider (small print, nice)
2. We have decided to sell up and move abroad. Thus, we don't want any tie-in period with new mortgage provider and this gives us much less choice and not as attractive rates.

So - what should we do? Obviously the housing market has slowed down somewhat now and I don't want to be paying lots of interest and losing out but of course, there is a cost involved with re-mortgaging too which needs to be considered.

All advice happily received!

Thanks,
NTL
-x-

JuiceFS

What a situation you have. Damned if you do, damned if you don't. You will have to weigh up your realistic timescales for moving abroad ie will it happen this year? If not, then it would be advantageous to consider your re-mortgage options. It's not just the monthly impact, it will be the overall cost when you do eventually redeem your mortgage. There may also be re-mortgage fees that you need to factor in, plus the most important early repayment charges. Fixed rates usually involve a 'tie-in' period but consider a tracker type scheme, meaning the rate/monthly payment can fluctuate, but you may not be tied in. You will need to decide what is more important to you. Your choice of lender will also depend on your credit history too, so this will need to be factored in to whether you stay or go. Your current lender may have a scheme that you could switch to, which could allow you to take advantage of a competitive interest rate whilst not tieing you in. I hope that makes sense? Good luck! Where are you planning on moving to?

Conrad

Take a look at The One Account, it has very very low fees and no tie in last time I looked.