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do i overpay interest only or fix now stolt

Posted: Fri Mar 10, 2017 5:54 am
by circlet
hi everyone just sending my mind into overdrive comparing the current fixed mortgage deals and i cant think anymore let alone make basic calculation

i have 102,000 outstanding on our mortgage. we are currently with santander on the SVR 2.29% and its interest only mortgage and the payment has been 195gbp a month which was great as we needed that while i did the house up, i have for the last year been overpaying by 800gbp a month to bring the balance down. keep reading that all the good deals are going to be cut because of brexit etc



i've been leaving it because of the low rates i pay a month and its flexible but i know if you fix many banks have charges for overpaying too much.



my question is ive seen a mortgage for 1.99% fixed for 5 years and a repayment so that takes my monthly payment to 432gbp a month and i plan to overpay this by 400gbp a month as it allows overpayments of 1000gbp a month.



I dont know whether to contine the overpayment on a interest only mortgage or to fix up now and start the repayment and overpay slightly

thanks for any help or suggestions

Posted: Fri Mar 10, 2017 4:46 pm
by herobrinehunter7
What is your repayment strategy for repaying the loan at the end of the term?

Posted: Fri Mar 10, 2017 10:19 pm
by circlet



What is your repayment strategy for repaying the loan at the end of the term?
Originally posted by glosoli


in the five years fixed thats going to be 24k. My mother in law wants to give us 45k in a couple of years time as she done the same for her other children.



so im hoping in 5 years it will be nearly paid off.

24k overpayments

24k 5 years worth of monthly repayments

45k mother in law gift.

total 93k

im also hoping that some months it will be more than 400gbp a month maybe 500gbp

Posted: Sat Mar 11, 2017 5:05 am
by tilbury
The 5 year fixed are you allowed to overpay by as much as you want to?



With ours we can only pay 10% each year.

Posted: Sat Mar 11, 2017 6:21 pm
by circlet



The 5 year fixed are you allowed to overpay by as much as you want to?



With ours we can only pay 10% each year.
Originally posted by POPPYOSCAR


i always thought its 10% but looking on the new mortgage details it says

Benefits

No booking fee
No completion fee
£300 cashback, paid on completion
Free First Standard Valuation available (max £445)
Make overpayments below £1,000 each calendar month without incurring early repayment charges
and i wont be able to pay anymore than that each month anyway

Posted: Sat Mar 11, 2017 10:39 pm
by tilbury



i always thought its 10% but looking on the new mortgage details it says

Benefits

No booking fee
No completion fee
£300 cashback, paid on completion
Free First Standard Valuation available (max £445)
Make overpayments below £1,000 each calendar month without incurring early repayment charges
and i wont be able to pay anymore than that each month anyway
Originally posted by stolt


Who is that with?

Posted: Sun Mar 12, 2017 3:06 am
by charlena



in the five years fixed thats going to be 24k. My mother in law wants to give us 45k in a couple of years time as she done the same for her other children.



so im hoping in 5 years it will be nearly paid off.

24k overpayments

24k 5 years worth of monthly repayments

45k mother in law gift.

total 93k

im also hoping that some months it will be more than 400gbp a month maybe 500gbp
Originally posted by stolt


do the numbers for 5 years time

current with £800 overpayment

£102,000 @ 2.29% £995pm £51,173

if rates don't change paid off in 9y6m



new with £400 overpayment

£102,000 @ 1.99% £832pm £60,220



new with same payment as now

£102,000 @ 1.99% £995pm £49,945



that change is will save around £1,200 any fees?



what rate does that 1.99% go to in 5 years?



If the MIL money does not happen for some reason you end up on that.





whats your LTV there may be better deals than 1.99%





if you get the money in a couple of years then fixing for 5 may not be the best option ERC will wipe out any savings..



a 2 years fix will be lower rate.





check what Santander have on offer they may let you keep the interest only on a retention deal switch.



A 2.29 variable rate is not shabby but if fairly confident on the MIL money then end of mortgage planning could save a bit, but not massive amounts main thing will be protection of the down side of rates creeping up.



The downside of dropping the interest only is the loss of the option to drop down to a £195payment if finances change.

Posted: Sun Mar 12, 2017 12:32 pm
by circlet



do the numbers for 5 years time

current with £800 overpayment

£102,000 @ 2.29% £995pm £51,173

if rates don't change paid off in 9y6m



new with £400 overpayment

£102,000 @ 1.99% £832pm £60,220



new with same payment as now

£102,000 @ 1.99% £995pm £49,945



that change is will save around £1,200 any fees?



what rate does that 1.99% go to in 5 years?



If the MIL money does not happen for some reason you end up on that.





whats your LTV there may be better deals than 1.99%





if you get the money in a couple of years then fixing for 5 may not be the best option ERC will wipe out any savings..



a 2 years fix will be lower rate.





check what Santander have on offer they may let you keep the interest only on a retention deal switch.



A 2.29 variable rate is not shabby but if fairly confident on the MIL money then end of mortgage planning could save a bit, but not massive amounts main thing will be protection of the down side of rates creeping up.



The downside of dropping the interest only is the loss of the option to drop down to a £195payment if finances change.
Originally posted by getmore4less


thank you for taking the time to write that out. i actually needed that i was going insane looking at all the different rates.

i agree my biggest concern and thats why ive left it on the SVR is because if i needed extra money for car servicing or xmas i could just pay the interest and follow up overpayments the following month.

im 100% on the MIL money its just when she can pay it and it wont be in one big lump sum it will be a couple of thousand each time.

my LTV ratio is quite low about 17%

the ratio after the fix term at the moment is 3.99% but im hoping in 5 years time we would possiibly only have a few thousand left



i did have a look with santander and at the 5year fix they only seem to have one which also has a fee and charges

5 year fixed rate

1.89% £999 Free valuation and standard legal fees paid

ERC 5% + Repay paid legal fees £42



i keep thinking a 2 yr fixed isnt for me, because although i might be better off in two years i will still have some way to go with the balance.

Posted: Sun Mar 12, 2017 7:23 pm
by charlena
£45k average per month

5y £750pm

4y £937pm

3y £1250pm



On the 5y fix you will be hitting ERC if you want to do your £400pm overpayments and use MIL money as it drips in.



if you can get to the £1k overpayment from the start



£102,000 @ 1.99% £1432pm £22,400