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Thread: Ditch the fix?

  1. #1

    Ditch the fix?

    Hi all, I just did a mid term mortgage review (2.5 years into a 5 year fix) current rate is 2.69% I can get a fee free 5 year for 1.99% but early repayment charges of just short of 2.5k. So, whilst I know no-one has a crystal ball want would you all be tempted to do? Here's the financials/pros/cons, as I see them:

    1. If ditch I need to.stump up 2.5k out of my savings which are earning a respectable 3% approx 200 over the remaining mortgage period.

    2. Each month on the new rate I'll save approx 55.

    3. Over the remaining term of the existing mortgage I'll pay an additional c700 more if I ditch (including the erp).

    4. But if I ditch I'll save about 700 Over the new 5 yr term - 200 in lost interest.=500 saved over 5 years...not great but still...

    5. The main benefit that I see then is that the lower rate runs me for another 2.5 years so into 2022 rather than 2020 and gives me security up to then.

    6. It's always a gamble as my current rate isn't terrible and who knows where well be come nov 2020 (when my rate ends)

    7. Current thoughts are for an imminent base rate rise (or August depending on what you read) BUT inflation went down to 2.7% in Feb so the actions of the BoE seem to be taking effect (.25 rate rise in Nov), granted could be other stuff too.

    My heads spinning and I know there's no definitive answer, just seeking opinions !!!128513;

  2. #2
    Missing the crucial bits of information to do proper caclulations
    The amount borrowed
    full term.
    ERC schedule(% and months to changes in that)

  3. #3
    Ive 1 year left on a 5 year fix with Tesco at a current fixed rate of 4.09% paying 454.49, which then reverts to a SVR of 4.24% paying 459.60.
    The overall cost for comparison on my mortgage is 4.3%.
    Ive currently 18 years left on the mortgage as of July this year and roughly about 68,000 left to pay.
    There is an early repayment charge of 2% which equates to 1469.32.
    I was thinking of switching to a new 5 year fix and reducing the amount of years to 12 years at a fixed rate of 1.92% paying 529.09 and the overall cost for comparison is 2.9%. There is a product fee of 995 as well which i would probably put on the mortgage.

  4. #4
    we have just done a rate switch with current mortgage provider it was really easy no checks required just a simple switch

  5. #5
    we had 20 years left we paid 361 pm but at the end of this term we have switched to another 5 year fixed at 2.99% and dropped to 16 year term paying 347 pm so small saving a month and 4 years knocked off term fixed definitely works better for us
    we're with Monmouthshire building society

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