Re-mortgage now or wait?

[bobski1]

I have a 5yr fixed which is due to end September next year. I should have around 240k left at that point but that is without overpayments. I plan on increasing them to around £200/month from this month to help bring the balance down as much as I can until the rate ends.

Given what is going on with rates at the moment I am curious what people think to paying a fee to end the mortgage now and fix again for 5-10yrs and hope to save that fee by paying the lower rate vs waiting till June next year which is when I can sort out a new rate.

[Sarnie]

bobski1 said:

I have a 5yr fixed which is due to end September next year. I should have around 240k left at that point but that is without overpayments. I plan on increasing them to around £200/month from this month to help bring the balance down as much as I can until the rate ends.

Given what is going on with rates at the moment I am curious what people think to paying a fee to end the mortgage now and fix again for 5-10yrs and hope to save that fee by paying the lower rate vs waiting till June next year which is when I can sort out a new rate.

You can secure a new rate up to 6 months out, so March next year, not June.......

[durbster]

Rather than overpaying a low rate of interest, isn't it better to take advantage of the rising savings rates and put what you would overpay into a savings account, and then using it to overpay when the fixed deal is up?

Savings accounts have mostly overtaken the typical mortgage rates we were seeing in recent years.

[Edible Roadkill]

I presume a 1% erc ?

I was seriously considering paying mine yesterday to grab a best deal & I’ve only got 8 days until I can remortgage penalty free ! All current deals are on thin ice.

I would it do now if I were you. How many multiples of 1% erc would 1%, 2% etc add to a new 5yr term should you wait. Get the numbers in front of you and decide.

[Raymond Reddington]

I'm thinking of doing the same, ours is up on the 1st of May next year, currently on 2.8% with 138k left... I'd rather lock in a couple of years of just under 4% than risk the alternative I think. Can't lock in a new rate until 3 months before current deal ends. We wanted to move early next year but I don't think that's sensible sadly.

[bobski1]

Got to sit down tonight and get the exact numbers based on what I have left. If my estimates are right I should have an <60% LTV so that would work in favour of a better rate.

If it is 6 months out to lock in a new rate then I only have 6 months until then but as we have seen a lot can happen in that time frame hence why I want to try lock something in sooner.

[gotoPzero]

IANAFA. I expect the base rate to go up to at least 4.5%.

I think we are looking at 3-4 more rises in a row to get us there. That will take us to spring.

Then I have a feeling we will sit there for a good while. I think the banks will play the long game rather than the short sharp shocks of years past.

Thats just my 1.7ps worth FWIW.

[Sarnie]

Raymond Reddington said:

I'm thinking of doing the same, ours is up on the 1st of May next year, currently on 2.8% with 138k left... I'd rather lock in a couple of years of just under 4% than risk the alternative I think. Can't lock in a new rate until 3 months before current deal ends. We wanted to move early next year but I don't think that's sensible sadly.

You can secure a new rate from 6 months out, not 3 months......

[bobski1]

doing a quick deal checker the rates & deals I can get I would be paying similar to what I pay now so I wouldn't get much of the fee I would have to pay back over the next 2-5yrs however if the rates were to increase and I lock in now/soon then I could potentially save a lot of money each month but that is a huge IF and also depending on what the rates are.

2yr I can get rates of around 2%, 5-10yrs I am looking at 2.8% and really it is a question will the rate increase much in the next 6 months as 4% would see monthly payments increase by £150.

This does also highly depend on the LTV (I've just checked on zoopla & gone in the middle of the estimated price) but if the market crashes then again locking in now would be in my favour for the better rate. When going through re-mortgage process does the new lender do full surveys/valuations again or would it be a desktop study?

[Raymond Reddington]

Sarnie said:

You can secure a new rate from 6 months out, not 3 months......

I did a quick check online and the information suggested 3 months for Halifax but I will have a proper look, thank you

[Sarnie]

bobski1 said:

doing a quick deal checker the rates & deals I can get I would be paying similar to what I pay now so I wouldn't get much of the fee I would have to pay back over the next 2-5yrs however if the rates were to increase and I lock in now/soon then I could potentially save a lot of money each month but that is a huge IF and also depending on what the rates are.

2yr I can get rates of around 2%, 5-10yrs I am looking at 2.8% and really it is a question will the rate increase much in the next 6 months as 4% would see monthly payments increase by £150.

This does also highly depend on the LTV (I've just checked on zoopla & gone in the middle of the estimated price) but if the market crashes then again locking in now would be in my favour for the better rate. When going through re-mortgage process does the new lender do full surveys/valuations again or would it be a desktop study?

There are no two year fixed rates anywhere near 2%. Only discounted rates, which will go up with the lenders SVR anyway, so not much point..........

[Greenmantle]

durbster said:

Rather than overpaying a low rate of interest, isn't it better to take advantage of the rising savings rates and put what you would overpay into a savings account, and then using it to overpay when the fixed deal is up?

Savings accounts have mostly overtaken the typical mortgage rates we were seeing in recent years.

I think its going to be a game of leap frog.
Mortgage rates on renewing will be higher.
The sweet spot on savings is 2yr fixed at 4%.
As with all these things its timing.
Too many things coming along in this time period.
End of October will see another rise from Ofgem in the energy cap.
There is still plenty of fuel to keep the inflation rise fire still burning.

[Matt p]

Nationwide at 4.24% for me on a 2yr fix sub 60% LTV.

Should’ve pulled the trigger and fixed for longer this time last year. Oh well 1.24% fix for two years was enjoyable

[Puzzles]

If money is a little tight and you can lock in a rate which is comfortable I’d do it. That way ooh mitigate the risk of it going t.ts up got you.

[Consigliere]

Sarnie said:

You can secure a new rate up to 6 months out, so March next year, not June.......

Im with Santander and to choose a new product when my current fix comes to an end is 4 months before the end date (if i have read it correctly). Due to end in May so I can choose another product (with Santander) in January.

[Sarnie]

Consigliere said:

Im with Santander and to choose a new product when my current fix comes to an end is 4 months before the end date (if i have read it correctly). Due to end in May so I can choose another product (with Santander) in January.

Choose a rate with another lender 6 months out......in the current market, that two months could be a significant difference in rates......

[Consigliere]

Sarnie said:

Choose a rate with another lender 6 months out......in the current market, that two months could be a significant difference in rates......

will the lender agree to a product 6 months away (and honour it)?

[Sarnie]

Consigliere said:

will the lender agree to a product 6 months away (and honour it)?

Santander won't on a product transfer but other lenders will (but not all) offer a six month offer period.....

[nunpuncher]

Matt p said:

Nationwide at 4.24% for me on a 2yr fix sub 60% LTV.

Should’ve pulled the trigger and fixed for longer this time last year. Oh well 1.24% fix for two years was enjoyable

There's slight reassurance in discovering I'm not the only person that was stupid enough to take only a 2 year fix when the rates were so low. Will be another 6 months before I can lock anything new in so by then it'll probably mean my monthly payments will near enough double.

Starting to hope Putin does just wipe us all out with a nuke.

[Shappers24]

Been thinking the same. I’m due to come off a 3 year fix of 1.5% next year. My calculations show a rate rise to 5-6% will see my repayments near enough double… interesting times ahead.