Mortgage Dilemma
Author
Discussion

Bing o

Original Poster:

15,184 posts

235 months

Tuesday 6th September 2011
quotequote all
Chaps (and chapesses),

I've just dropped onto my lender's SVA of 4.24% (this is saving me 100 quid off my old fixed rate of brown trousers time 2008). My balance as at today is £116,860, with 19years and 8 months left.

My options are as follows:

1a. Overpay on SVA Rate - by upping payments from £730 to 999.97, I can reduce the term to 12yrs 7mnths. Or I can get it down to 10years if I pay off 1,196.53 a month.

1b. Alternatively I could get the debt down to 110,000 with a capital repayment, and then finance the rest with regular overpayments of 997.36 to bring the term down to 11years 8months.

(As I'm on SVA, there are no overpayment limits)

2a. Switch to a Tracker - 2 years at 2.39+BOE and fees of £624. I can come off this onto a Fixed deal without penalty at any time...

2b. Fix at 5 years, 4.24%, Fees £125, and make my 10% overpayments

Now Option 1a seems to be the best for me, as I can afford the monthly extras and want to clear as much as possible as soon as possible. But, I live overseas, and am concerned that interest rates going up in the UK will also hit me on the FX (assuming GBP appreciates as a result on the FX markets).

Just a sanity check really, as I have a knack of fking up stuff like this (hence I've been fixed at 5.xx% for the last few years...)

Sarnie

8,233 posts

225 months

Tuesday 6th September 2011
quotequote all
Why not reduce the balance to £110k and go with 2a as that will reduce your payments further allowing more of your payments to be capital repayments as that seems to be your aim......

fido

17,859 posts

271 months

Tuesday 6th September 2011
quotequote all
Switch to an Offset mortgage .. you can pay off the capital quickly but still get it back when you need it? Great if you get bonuses etc.

Podie

46,646 posts

291 months

Tuesday 6th September 2011
quotequote all
Might be worth speaking to PHer scotal

Bing o

Original Poster:

15,184 posts

235 months

Tuesday 6th September 2011
quotequote all
Thanks guys. Scotal's been a massive help, but as he makes no money off me staying with the Spanish mob, it seemed unfair. I also can't take an offset as I'm not uk resident.

I can look at 2a with a capital reduction I guess, but I'd rather pay down extra every month, which 2a precludes me from doing over 10%. the problem obviously is if/when rates go up, as at least I'm not tied to any early redemption penalties. I'm a bit new to all this financial responsibility lark!

Sarnie

8,233 posts

225 months

Tuesday 6th September 2011
quotequote all
Bing o said:
I can look at 2a with a capital reduction I guess, but I'd rather pay down extra every month, which 2a precludes me from doing over 10%. the problem obviously is if/when rates go up, as at least I'm not tied to any early redemption penalties. I'm a bit new to all this financial responsibility lark!
But from the figures you've mentioned you won't be paying more than 10% over payments per year....you would have to be paying £1500+ per month in total before you hit that limit....

Bing o

Original Poster:

15,184 posts

235 months

Tuesday 6th September 2011
quotequote all
Sarnie said:
But from the figures you've mentioned you won't be paying more than 10% over payments per year....you would have to be paying £1500+ per month in total before you hit that limit....
You see, this is why I asked, I'd been working on 10% of the interest not the capital for some bizarre reason! What a muppet I am!

XJSJohn

16,092 posts

235 months

Tuesday 6th September 2011
quotequote all
dont forget that although the GBP may be worth about the same as a Zimbabwe Dollar at the moment, it probably won't stay that way indefinitely, or that the SGD may be devalued in the next year or so, this will affect your available spare dosh a bit ....