Fixed rate deal ending, got money coming to me... what to do

[CoffeeGuy]

Hi Everyone,

Looking for advice and opinion. My fixed rate @ 1.6% ends this month. Halifax being the jokers they are are giving me a new rate of 8.5% on variable rate. 11 year remaining.

Mortgage amount outstanding is £36k and change. In November I get SAYE shares maturing worth (assuming everything stays equal) £30,000 plus I have about £3-4K in liquid cash on hand.

I am reticent to enter into a new fixed rate for the sake of 4 months of payments because when I come along in November and drop £34,000 on them they will want 2% of it. That and I dont want any "arrangement fees" or other shenanigans.

So really, this is a case of what would you do? I think I am doing the right thing but it's always good to get a second opinion.

[AllyM]

Given you are near the end of your fixed rate, maybe there is no ERC, or possibly something but a lot less than 2%?

You could used your liquid cash + a bank loan (that has no ERC’s) to pay it off now and then repay the bank loan in November?

[Hustle_]

It depends on whether you want to spend that £30k+ on something else.

It's a very manageable mortgage, sure it's tempting to pay it off, but it's not really doing you any harm and you could have some fun with that £30k+ instead.

[996 Turbo Time]

I would phone up your bank and ask what their lowest rate, no fee, no ERC mortgage is.

If it's lower than 8.5% then I'd move to that when the current loan ends and repay the SAYE amount when it matures.

I'd keep the liquid cash buffer in as high an interest current account that I could as you never know when you'll need it and the cost of keeping it would be minimal.

[Sarnie]

996 Turbo Time said:

I would phone up your bank and ask what their lowest rate, no fee, no ERC mortgage is.

If it's lower than 8.5% then I'd move to that when the current loan ends and repay the SAYE amount when it matures.

I'd keep the liquid cash buffer in as high an interest current account that I could as you never know when you'll need it and the cost of keeping it would be minimal.

Halifax have no fee free, no ERC rates......

[Casa1862]

Pay the £4k and just suck up the 8.5% rate for a few months, hassle free and more than balanced by the massive savings you've had at 1.6%. You'll pay for some form of re-mortgage, take that away from the few months you have left and I can't see you being much worse off.

Or take a short fix and deposit the £30k in a fixed interest savings account and have your own Offset mortgage, pay it off when the ERC has lapsed.

Edited by Casa1862 on Wednesday 3rd July 14:49

[DaveH23]

Remember you will owe CGT on any profit over £3k of those shares.

Alternatively, You have 90 days to put it in an ISA then you won't pay any tax but you're limited to £20k in the ISA assuming your don't already have one.

[Terminator X]

Pay it off and leave £1 on the mortgage. Apparently it looks better on credit checks to have one vs not.

TX.

[halo34]

Just don’t pay for advice!

[Cats_pyjamas]

DaveH23 said:

Remember you will owe CGT on any profit over £3k of those shares.

Alternatively, You have 90 days to put it in an ISA then you won't pay any tax but you're limited to £20k in the ISA assuming your don't already have one.

If the shares he sells have matured in the shares scheme then it likely they are free from CGT. (Although advisable to look into the ts and cs of the scheme).

[55palfers]

Cats_pyjamas said:

If the shares he sells have matured in the shares scheme then it likely they are free from CGT. (Although advisable to look into the ts and cs of the scheme).

Are you sure?

Great news if correct.

[BoRED S2upid]

There won’t be a fee to clear it once your fixed rate is over. Being mortgage free would be great. You can soon build up your savings from the no mortgage payments. Just pretend you still have a mortgage for a year.

[2 GKC]

That’s a nice bunce from an SAYE assuming a three year plan. Shares must have done well

[MattS5]

DaveH23 said:

Remember you will owe CGT on any profit over £3k of those shares.

Alternatively, You have 90 days to put it in an ISA then you won't pay any tax but you're limited to £20k in the ISA assuming your don't already have one.

I was about to post this too.

[CoffeeGuy]

Hey Everyone,

Sorry for the late reply... Updates.....

Halifax where as inflexible as expected.

As for "getting the cash out" I intend to gift the mrs half and I have half, into an ISA each and bobs your uncle. To be fair that's the bit that worries me, never done it and the large sums involved make me nervous. The other way to do it would be to take the 20K in an ISA and rinse and repeat April 6th?

Re: Shares doing well, yeah they did - I was in for a 5 year plan. Some people I know had their scheme start a year earlier and the gains where even greater. Some walked away with 74K including contributions (before taxes, ISAs and such.)

[CoffeeGuy]

CoffeeGuy said:

Hey Everyone,

Sorry for the late reply... Updates.....

Halifax where as inflexible as expected. SVR gets me a new monthly payment of £508.

As for "getting the cash out" I intend to gift the mrs half and I have half, into an ISA each and bobs your uncle. To be fair that's the bit that worries me, never done it and the large sums involved make me nervous. The other way to do it would be to take the 20K in an ISA and rinse and repeat April 6th?

Re: Shares doing well, yeah they did - I was in for a 5 year plan. Some people I know had their scheme start a year earlier and the gains where even greater. Some walked away with 74K including contributions (before taxes, ISAs and such.)

[Snozzer]

Terminator X said:

Pay it off and leave £1 on the mortgage. Apparently it looks better on credit checks to have one vs not.

TX.

Very true, my credit rating dropped when I paid mine off