Mortgage advice please.

[STONEISLAND]

I’m on a fixed rate at a stupidly high interest rate of about 6% as I set my mortgage up on a 2 year fixed rate before the ‘credit crunch’. Rumour has it today there going down to .5%!!!!

I have about a year and quarter to go on my mortgage. The question is it worth paying the penalty (not to sure at this stage I guess about a grand or two????) to come out of it and re-mortgaging on a much lower rate?

TIA

[Raistlin]

Only you can work that out - if you're going to save significantly more than you'd spend in penalties, and if you can actually get a mortgage at the moment, then it may be worth it.

[Osem]

Depends on the charges you'll incur, the new rate you can get and of course the size of the mortgage. Interest rates can't go much lower but if your mortgage is small and the various charges high it may not be worth the effort.

[STONEISLAND]

Originally Posted by Rob M

Only you can work that out - if you're going to save significantly more than you'd spend in penalties, and if you can actually get a mortgage at the moment, then it may be worth it.

Even though I'm on a good wage and never missed a payment I may not get a chance to re-mortgage??

So wish I got a tracker.........

[Chris]

Originally Posted by STONEISLAND

Even though I'm on a good wage and never missed a payment I may not get a chance to re-mortgage??

So wish I got a tracker.........

There are mortgages out there, but the lending criteria have tighened up a lot. Again, we don't know enough about your personal circumstances to say what you would be eligible for.

The best thing you could do right now is find an independent mortgage adviser. They are normally free to you because they get a commission if they manage to arrange a mortgage for you. You can give them all your details and let them do the number crunching.

[STONEISLAND]

Originally Posted by Chris

There are mortgages out there, but the lending criteria have tighened up a lot. Again, we don't know enough about your personal circumstances to say what you would be eligible for.

The best thing you could do right now is find an independent mortgage adviser. They are normally free to you because they get a commission if they manage to arrange a mortgage for you. You can give them all your details and let them do the number crunching.

Sounds like my best bet.

Thanks all.

[Rob]

Remember that it's not just the interest rate you have to consider in changing mortgages.

There may be a penalty fee payable to your current provider.

There may be a valuation / administraction / application fee to the new provider

There may be solicitors costs to register the new mortgage.

If you are looking to a current rate mortgage, consider that with rates supposedly low, although very few show a close relationship to the Bank of England Rate, the only place for them to go now is up again. With the mess this government is now making of the economy, printing money bailing out banks and all sorts, there is a real risk that in a couple of years inflation will rise significantly. As our pound becomes even more worthless than it is today the response to inflation will be the traditional interest rate rises.

[STONEISLAND]

So your saying its not worth bothering?

[Rob]

Nope I'm saying you need to carefully understand al the pros and cons so you can make up your mind and not just look at the interest rate or accept what one financial advisor may be saying as fact.

The interest rate won't stop this long for ever, look back at the late 80's when the rate was at something like 10% within the space of 6 months it had gone upto around 20%, my mortgage went from £58 a month to £108 a month in 6 months, this caused the big recession of the late 80's with peoples houses getting snatched back by the lenders.

Beware which deal you go for.