Mortgage Interest Rates

[Leyth Blue]

You will have to pay the early repayment charge if you switch as you are part way thru your deal..

It would be far better for you to stay as you are and pay off as much as you can with your overpayments, that way when your deal does come to a end you have a lower balance and any interest rate rise will have a less limited effect.

But it is not an overpayment in the sense that the amount of the mortgage is reducing more quickly - the capital repayment (The amount the mortgage is reducing by) remains the same and the "overpayment" is merely the higher interest paytment taken by the bank (who will in turn have borrowed the money at a higher rate).

You need to calculate what the early redemption fees will be along with the set up cost of a new mortgage and see if this is offset by the amoun that would be saved at a new lower mortgage rate for the remainder of the term to see if a shift is worthwhile at this stage.

 

[kaz7]

You will have to pay the early repayment charge if you switch as you are part way thru your deal..

It would be far better for you to stay as you are and pay off as much as you can with your overpayments, that way when your deal does come to a end you have a lower balance and any interest rate rise will have a less limited effect.

But it is not an overpayment in the sense that the amount of the mortgage is reducing more quickly - the capital repayment (The amount the mortgage is reducing by) remains the same and the "overpayment" is merely the higher interest paytment taken by the bank (who will in turn have borrowed the money at a higher rate).

You need to calculate what the early redemption fees will be along with the set up cost of a new mortgage and see if this is offset by the amoun that would be saved at a new lower mortgage rate for the remainder of the term to see if a shift is worthwhile at this stage.

Overpayments reduce the capital amount thus saving you interest as you pay off the mortgage quicker
I had a £50,000 mortgage and through overpayments over several years i got it down to £36,000 so when my endowment matured it covered it and gave me some cash
Overpayments should always been done if you can as it makes a difference

 

[M18CTID]

Yes that's why we took out the fixed rate because we were comfortable with the monthly amount , so with you saving thousands does that mean we would have to ?

Probably
I was fortunate to know someone who gave me fantastic advice and for once in my life I made the right financial decision.
Do not regret your decision to fix your rate. At the time it was, for you, the right decision to make
If you start worrying about it now, it'll eat you up
Did you fix on about 4.99%?

We fixed it on 5.34%

To be honest that, at the time, would've been very good for a 10 year fixed rate. As a comparison, when I bought my house in 2004 with my (now) ex-partner we opted for a 7 year fix with Northern Rock at 6.09%! Long before that deal was up, we split up and I bought her out but I was stuck on that rate until late-2011 by which time interest rates had been at their record low for over 30 months. Worse still, because I'd increased my borrowing in order to buy the ex out I didn't have enough equity in the house to move onto another much better rate when the 7 year fix came to an end and I'm still stuck on NRAM's SVR of 4.54%. Miles better than the 6.09% deal of course but being an SVR it offers me no protection from future interest rate rises.

 

[Leyth Blue]

You will have to pay the early repayment charge if you switch as you are part way thru your deal..

It would be far better for you to stay as you are and pay off as much as you can with your overpayments, that way when your deal does come to a end you have a lower balance and any interest rate rise will have a less limited effect.

But it is not an overpayment in the sense that the amount of the mortgage is reducing more quickly - the capital repayment (The amount the mortgage is reducing by) remains the same and the "overpayment" is merely the higher interest paytment taken by the bank (who will in turn have borrowed the money at a higher rate).

You need to calculate what the early redemption fees will be along with the set up cost of a new mortgage and see if this is offset by the amoun that would be saved at a new lower mortgage rate for the remainder of the term to see if a shift is worthwhile at this stage.

Overpayments reduce the capital amount thus saving you interest as you pay off the mortgage quicker
I had a £50,000 mortgage and through overpayments over several years i got it down to £36,000 so when my endowment matured it covered it and gave me some cash
Overpayments should always been done if you can as it makes a difference

But Tuertsoverhead Kick is not "overpaying" in that sense - he is paying more than what is the current norm in interest rates but the extra will not go against the capital on his mortgage repayments only the higher interest payments.

 

[kaz7]

But it is not an overpayment in the sense that the amount of the mortgage is reducing more quickly - the capital repayment (The amount the mortgage is reducing by) remains the same and the "overpayment" is merely the higher interest paytment taken by the bank (who will in turn have borrowed the money at a higher rate).

You need to calculate what the early redemption fees will be along with the set up cost of a new mortgage and see if this is offset by the amoun that would be saved at a new lower mortgage rate for the remainder of the term to see if a shift is worthwhile at this stage.

Overpayments reduce the capital amount thus saving you interest as you pay off the mortgage quicker
I had a £50,000 mortgage and through overpayments over several years i got it down to £36,000 so when my endowment matured it covered it and gave me some cash
Overpayments should always been done if you can as it makes a difference

But Tuertsoverhead Kick is not "overpaying" in that sense - he is paying more than what is the current norm in interest rates but the extra will not go against the capital on his mortgage repayments only the higher interest payments.

Crossed wires i think,i was responding to overpayments that cut down the capital amount.I am just glad i don't have to worry about it anymore,it always confused me