Our mortgage is on in a 5 year fixed term, ending soon. It costs £1200 at the moment and is at 5 or 6%. If it comes down to the base rate is there a way to work out what our new payments will be or could anyone hazard a guess?
Is it repayment or interest-only. (More likely to be repayment). To do a calculation you need to know either what the outstanding balance is (the debt remaining) or the remaining term (ie how long the entire mortgage is due to run).
If you know roughly what is outstanding then use an online mortgage calculator - just pretend you are taking out a new loan for the outstanding amount. We are able to overpay £150 a month since ours came to an end.
At the end of your fixed term your mortgage will flip on to the lenders standard variable rate...which for most lenders is around 3.7/3.9%
On that basis your monthly repayments would reduce.
However, you need to check what the standard variable rate is for your lender (I doubt very much that it would be base rate) and you might find that it's cheaper to enter into a new deal. I've just arranged a 5 year fixed at 2.3% and if you have more equity there are even cheaper deals out there.
Thank You, I'm finding it all quite confusing! We have around £200,000 left to pay over 25 years. I'll have a look at their base rate and see what ot works out at. I'm not sure how it all works when it comes to an end - will they write and give us options or does it automatically just go into their standard rate?
You can use this - type in the outstanding debt (200,000 or whatever), the remaining term (25y or 20y if you are saying original term was 25 and you have 20 left). Then you can play around with the interest rate you think you can get (leave the fees blank) and select repayment.
Your mortgage company will just flip you on to their standard variable rate - they should write to you with details of your new monthly payment, but if you want a new deal you will need to shop around. I.e. The mortgage company won't just tell you what deals they have, you have to go looking for yourself.
I would suggest using a mortgage broker, look for a whole market broker not one linked to an estate agent.