Re-mortgage fixed or tracker? Louise447

#1
Afternoon!



Feeling very confused about what to do. Our 5 year fixed rate ends in June. We can remortgage early with our current lender, Nationwide.



I don't know whether to get a tracker or fixed and if fixed, how long for. We got a 5 year fixed last time at 4.89% but since interest rates went down, it wasn't the best financial move! They realistically can't get much lower so I'm leaning towards fixing with financial uncertainty ahead. We still owe £186,000 with our house value at £350,000.



We'd like to get the payments as low as possible, save a little, get some house bits sorted (new roof etc) and then over pay. Alternatively we could get a tracker and overpay for a while and switch to a fixed deal if rates seem like they are starting to go up.



But really can't think clearly about what to do for the best! A crystal ball would be v.handy.



So, if you were in our situation, what would you do!

#2
We'd like to get the payments as low as possible



That needs the rate as low as possible if a simple retention deal.



and/or you could go full application and extend the term to bring the payment down.

#3
I did consider extending the term of the mortgage from 25 to 30 years. That would save a further £100 a month. But, I understand that lengthening the mortgage means we would end up paying more in the long run if we didn't shorten the term?



I think we will end up fixing for 5 years and taking advantage of the lower interest rates. We'll be saving £300 a month so it's going to be very good for us either way.

#4
We are in a similar position and I am really not sure what to do.



Ours is 5% so our saving will be £300 a month at least so its win win but its would be £380 if I went to a 2 years fixed instead of 5 years...

#5



I did consider extending the term of the mortgage from 25 to 30 years. That would save a further £100 a month. But, I understand that lengthening the mortgage means we would end up paying more in the long run if we didn't shorten the term?



I think we will end up fixing for 5 years and taking advantage of the lower interest rates. We'll be saving £300 a month so it's going to be very good for us either way.
Originally posted by Louise447


That's a bit of a myth, what really matters is how much you pay and when you pay, all the term does is determine the contractual payment.



If you need more money now then a shorter term will give you that, you just overpay more later, the amount you have to do stuff or pay the mortgage does not change.



You pay more if you borrow more for longer but that will happen anyway if you are spending money and not paying as much to your debt.



if you don't have the cash to do what you want now you have to borrow or save as you already have borrowing saving is just delaying paying of the debt. so you are borrowing why not just borrow bit more for a bit longer and get what you want done sooner.



The extra cost is the interest on the difference between doing it now or a bit later.

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