Is it worth remortgaging if you think your house has increased in value?

[Stokey]

House prices are moving up really quickly in our area and I think our house has increased by at least 20%, maybe 25%, since we bought it.

We are only 2 years in to a five-year fixed mortgage at about 5% and have a 75% LTV. Anyone know if it would be worth remortgaging either to reduce our monthly payments or to free up some money for an extension?

[brumeye]

You haven't told us what the early redemption charge is on your mortgage. Two years into a 5 year fix, I'd expect the penalty to dwarf any saving you'd make by moving to a mortgage with a lower rate. You need to check your paperwork to find out how much your lender will charge.

[ilovepowerhoop]

you would pobably have to pay quite a big fee to get out of your fixed rate early. You would need to look at any penalties first

[lalalonglegs]

You'd probably have to pay a big redemption fee to get out of your current mortgage so it may not be worth it. In theory, though, you now have about 40% equity in your house so you could probably find a lower interest rate deal. If you wanted to take extra money out to build an extension then you'd probably end up pushing back your equity to 75%.

[MummytoMog]

Yup, fraid you need to check out your redemption penalty. Probs massive and tbh, I think if you were going for another five year fix, you wouldn't save much. Different of course if you're thinking of extending and you really need the space now. If you started planning a year before the end of your fix, the timing would probably be right for remortgaging for the extra.

[Stokey]

WE don't really need the space - just would be nice to get it done - expanding kitchen/ separate dinning room to make big kitchen, dinner.

But cost likely to be £60-75k so not quite sure how we're ever going to manage it unless we use the value in the house.

Not sure what our redemption cost is - need to do the sums.

[greenfolder]

We are with nationwide.we have always kept original mortgage and taken out additional one with them if we have done stuff to house. You might not need to pay a redemption penalty. We currently have 12k at 2.5 per cent 13k at 3.8 per cent and 48k at 4 per cent.