Fixed rate ending - which way to go
Stevepd
Posts: 45 Forumite
Hi folks,
This is my first post and strongly believe the open discussion is knowledge. So our fixed rate with Santander is coming to an end and our fixed rate options are:
2 year, 1.69%, £999 fee = £600.61 pm
2 year, 1.89%, £0 fee = £610.69 pm
3 year, 1.99%, £0 fee = £615.77 pm
5 year, 2.19%, £0 fee = £626.01 pm
We are currently on a repayment @1.99%, £616.11 pm which ends in 109 days. The above figure are remaining on a repayment and we have £109,120.69 left for 17.6years.
What do you think is the best way to go and if we went the 1.69% route adding the £999 to the loan, would it have much of an impact over the period.
Steve.
This is my first post and strongly believe the open discussion is knowledge. So our fixed rate with Santander is coming to an end and our fixed rate options are:
2 year, 1.69%, £999 fee = £600.61 pm
2 year, 1.89%, £0 fee = £610.69 pm
3 year, 1.99%, £0 fee = £615.77 pm
5 year, 2.19%, £0 fee = £626.01 pm
We are currently on a repayment @1.99%, £616.11 pm which ends in 109 days. The above figure are remaining on a repayment and we have £109,120.69 left for 17.6years.
What do you think is the best way to go and if we went the 1.69% route adding the £999 to the loan, would it have much of an impact over the period.
Steve.
0
Comments
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What do you think is the best way to go and if we went the 1.69% route adding the £999 to the loan, would it have much of an impact over the period.
How much do you owe at the end of the product term. You might be saving £10 in monthly outgoings but will have more to repay in the longer term.
If peace of mind is what you are after. Then fix for 5 years.
If you are prepared to take a punt. Then the 2 year fix might be the preferred option. Overpaying by the £15 you've saved. Which will reduce the mortgage debt owed at the next fix.
There's no wrong or right answer. With interest rates likely to rise in the longer term. Paying down the debt owed as quickly as possible is the only guaranteed way of saving money.0 -
With a difference of 0.2% you need a bigger mortgage to make paying the £999 fee over 2years worth while.
Think £250k ( £999/0.002)/20 -
Thanks for your replies. I know it’s always subjective but you never know if somebody is going to give you that ureka moment. I’m inclined to go the 1.89% route with small overpayments, unless anybody else chips in.
On a separate note, how do I know that Santander have our house value correct as our neighbours have just sold up and I reckon ours would be of a slightly higher value. Would this info affect the LTV and subsequent offers, or big brother there’s your lot take your pick?
Steve.0 -
I would speak to a broker and look to move, you get nothing for loyalty and looking around won't hurt.
Consider early repayment charges and feelings on interest rate future.
Are you planning to move in the near future? You can port mortgages but it is a hassle and bank can say no.
Are you likely to come into funds in near future? If so longer fixed isn't so good.
If interest rates went up 1.5% could you cope okay with new payments in a couple of years?
Don't pay much for short fixes as poster before mentioned.
For me, I fixed for 5 years with an offset recently, I like the stability at this time as want to make a large dent in the debt, my guess is that interest rates will rise (to attract investment) so can move funds to take advantage, I'm on track to fill my pension up so maxed that out, as a higher tax payer saving are not great, I want all my funds to work for me including my emergency funds, I'm financially risk adverse so having access to my funds appeals to me and some years I'll be able to save more than the 10% overpayment.0 -
in my situation Is the no fee at 2.19% better than the 1.95% with £999 fee for me based on £45000 over 7.7 years left?. I’m struggling to work it out?.0
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adamcarvell wrote: »in my situation Is the no fee at 2.19% better than the 1.95% with £999 fee for me based on £45000 over 7.7 years left?. I’m struggling to work it out?.
The max you can save a year is £45000 * (2.19%-1.95%) = £108
It will be lower if on repayment.0 -
Ok thanks £108x five then I’m better off with the no fee deal. And yes it’s a repayment mortgage.0
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Looking at the figures it does not appear to be worthwhile paying a £999 fee for only a £240 saving over the 2 years. The 2 years without a fee looks cheapest but if you are worried about rates increasing and want the security of knowing where you stand the 5 year might be best assuming you don't plan on moving in the next 5 years.I’m a Forum Ambassador and I support the Forum Team on the Debt free Wannabe, Budgeting and Banking and Savings and Investment boards. If you need any help on these boards, do let me know. Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing forumteam@moneysavingexpert.com. All views are my own and not the official line of MoneySavingExpert.0
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adamcarvell wrote: »Ok thanks £108x five then I’m better off with the no fee deal. And yes it’s a repayment mortgage.
When the numbers are close you can do the more accurate calcs,
add the fees and see what's left at end of fix
for a 7.5 year(90months) full term in 5 years.
£45000 @ 2.19% £550pm £15,361
£45999 @ 1.95% £550pm £16,073
You only recover about £290 of the £999 fee with the lower rate0 -
No fee then is the better option now i can see the difference0
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