Re- Mortgages...

[SUBBlue]

Boring thread for a Tuesday - sorry people but as I'm in the process of remortgaging thought I'd chuck this one out there to see what the consensus was.

We were paying best part of a grand a month until my fixed rate expired Dec 09.
Payments have now dropped to around 700 due to current base rate.

We're considering various options such as....

- Carry on with with the expired fixed rate as we're saving shedloads each month
- Switch to a 2yr fixed rate paying more or less what we were before but decreasing the loan period by 5 years.
- Switch to a 2yr tracker (basically the base rate would have to jump by 1.35% in that period for us to be paying what we were previously...)

Not forgetting any of the last 2 options costs around 800quid to setup..

Any opinions on this one folks?

 

[DTS]

Morning,

As a rule decreasing the period is ALWAYS a good idea as long as you can afford the payments. If your life plans change at a later date you can always up this subject to your age and retirement plans.

As an alternative why not keep the term the same and set up a standing order to make regular overpayment to the tume of what the reduced temr would have been.

That way your making the same payment and reducing the mortage by the same amount you would have been yet if plans change ( I dont know your circumstances) but kids, redundancy etc - You can reduce down the payments to see you thorugh a period of uncertainy.

My other tip finally would be if you have any debts (credit cards etc) that are at a higher rate than the loan then pay them off first as in reality in your pocket this will be the bigggest saving.

I would be tempted personally to stay on the standard rate for the time and make as many overpayments as you can afford. If the rate goes up soon which most things I am reading say it wont you can jump into a deal then. I currently have three places all in the standard rate so I am practising what I preach.

As a final thought if your a family man with wife/kids you should really use the money you have spare to get some form of cover in place (Life cover first then Income protection)

I am about three/four weeks from setting up on my own as an IFA. If you wanted any help at that stage I would be delighted to help and also put a few quid SZ way as a thanks for your business.

As a final note £800 is fairly standard now adays and you would pay this for a fair to decent deal.