Cutting 2 years off, when re mortgaging every 2 years

[anonymous-user]

[redacted]

[Sarnie]

Yes

[anonymous-user]

anonymous said:

[redacted]

Have you been benefiting from the "fixes" or paying for insurance that you don't need? Always worth a thought.

[Sarnie]

anonymous said:

[redacted]

He's asking if you needed the "insurance" of a fixed rate.................

But as discussed previously, fixed rates are the same if not actually lower than Tracker/Variable rate options......so no brainer to fix currently........

[KTF]

What I did was keep the existing term but upped the overpayment to the level it would have been had the term been reduced.

That then allowed me some flexibility to drop the overpayment and reduce the monthly outgoings if needed, rather than be locked in to a shorter term and higher payments for good.

[anonymous-user]

Sarnie said:

fixed rates are the same if not actually lower than Tracker/Variable rate options......so no brainer to fix currently....

Moneysavingexpert has some handy tips on its website which include, " Like all mortgage deals, fixed rates have pros and cons:

• Pro = Certainty – you know exactly what your mortgage will cost.

• Pro = Your payments won't go up over the life of the fix, no matter how high rates go.

• Pro = You'll know EXACTLY what you'll pay, meaning you can budget around it.

• Con = ....starting rates are usually higher than on variable products. [N.B. So always check carefully.]

• Con = If interest rates fall, you won't see your payments drop.

• Con = If you want to get out early, you'll usually pay high penalties. [N.B. Regular PH threads about "exit penalties" and "overpayment restrictions.]

https://www.moneysavingexpert.com/mortgages/fixed-...

[mfmman]

Whilst it's been helped by falling interest rates, every time we have fixed (I like the security and don't mind paying a little extra for it) I have shortened the term so my monthly payment stays the same.

Each time the repayment has been about £450 a month, I have fixed for 5 then 3, then 5 then 5 years and when the current deal runs out I intend to pay the remainder from savings. Started at 25 years, should be all paid off about 19 years after I started.

[gibbon]

Sarnie said:

He's asking if you needed the "insurance" of a fixed rate.................

But as discussed previously, fixed rates are the same if not actually lower than Tracker/Variable rate options......so no brainer to fix currently........

Unless the rates are flat and you believe they will cut rates.

I prefer to keep standard monthly charges relatively low, and then overpay, just gives you more flexibility if your situation should change.

[I 8 a 4RE]

This is a savvy plan.

Keep an eye on 'closing costs / admin fees' for your new mortgage.
If you save £50 in monthly payments, but admin fees are £1000 (even if added to the loan), you haven't gained anything.

Consider locking in for a longer term; 5 or 10 years.
How much lower can interest rates go (so your upside is limited) vs. there is a lot of room for interest rates to go up (so your downside is substantial).