If you're still on a low mortgage rate

[Curlewwoohoo]

Are you overpaying? Saving? Or just carrying on as normal? Just interested to see if people are taking any steps for when fixed rate ends.

THIS.

It is not a simple comparison of interest rates. It involves -

1. Obvious hard maths about which leaves you better off including tax on savings
2. But also - what your aim is. i.e. if you need the equity in the house for a deposit on upsizing in 2 years time - you need to calculate which option leaves you better off in 2 years. It may not be all that different at short term 2 years point. OTOH - if you're planning to pay off mortgage - saving might leave you better off. CONTEXT matters.
3. And softer factors like - money sitting in a savings account can be access if life happens. Money overpaid is gone and done - and cannot be extracted back out on a whim if life happens. make of that what you will.

My rate which I think is 1.3 finishes next summer. I've been overpaying all the time I've been on this rate and when I get to the point at which the rate expires I will have about 1 yr left to pay. Not sure whether I will leave this last year of payments as a mortgage (around 20k) and start plowing cash into my pension for the next few years and then if I am still on current.salary and DC need university money I have already boosted my pension...maybe I should seek financial advice 🤔

No it is not solely about 5 is bigger than 1. It is about doing the actual calculators for individual contexts (re: whether the aim is to upsize and equity needed in short term, or pay mortgage off) and softer human factors like the easy-accessibility of savings and the total inaccessibility of money which has become brick and mortar. Humans make human choices when life happens, and it never is a decision that is solely about 5 is bigger than 1.

whether the aim is to upsize and equity needed in short term, or pay mortgage off

But all we're talking about is whether the overpayment money is sent to the mortgage now, or saving it in a higher paying savings so it can be sent to the mortgage when the current fixed rate ends, when the money in question will have grown by more than the amount that it would have shrunk the mortgage by.

Whether your plan at that time is to continue overpaying with the aim of paying off the mortgage or using your equity towards upsizing is irrelevant and not affected by the decision to save or overpay.

I managed to get a 5 year 0.5 percent, got one year left. I've been overpaying the maximum amount.

Is this a 10 or 15 year deal? I'm thinking it must be 15, as you would have been unlikely to have been able to fix so low last year.

We have 3 1/2 years left of a 1.85% fixed rate. We're overpaying an extra £1200 a month to whittle it down as much as possible.

I am fixed 2.97 until the end of this year (end of 5 year term).
I have just less than 14 years left to pay (a little under 60K), so it's not massive. I pay £431 / month atm.

We were mortgage free until I bought ex out, so my loan is 1/2 the value of the house.

I have not overpaid or saved towards a lump payment as I needed to get my finances back on track after the divorce.

I really need to look into what to move to now. It's hard to know where to go for advice.

I’m on 1.2% but I only have £11k (and 2 years) left to pay.
My low interest period is up in march 2024.
I’m saving like mad to get it paid off beginning of march just cos I want it out the way now and that amount is do-able.

It's going to be a problem potentially as I've been moved onto universal credit since taking out my mortgage so remortgaging may be an issue. Tax credits was ok. I live in a cheap house in a cheap area so I owe less than some of you are talking about saving, but it's a lot of money to me. Not really sure if trying to over pay is worth it on a smaller amount. The overpayments would be small too. Current deal ends in 2025.

Overpaying

We have £250k left on the mortgage (approx half of the house's value) and are fixed at 1.7% until 2025. DD1 finished nursery in the summer so we no longer have her fees to pay....with the extra money we've been saving half and putting the other half as an overpayment on the mortgage.

We'd be ok if our mortgage payment jumps up by a few hundred a month as we'd just stop the overpayments. However we're seriously considering relocating to be closer to DH's side of the family as they live in a much cheaper area of the country and we could realistically buy a house outright there with the equity in our home. It would mean downsizing a bit but it's Plan B if we need another option.

I'm on 1.99% until 2027, completed on my house in 2022 just as Truss/Kwarteng came in. Overpaying now to get huge mortgage and LTV down. Should receive decent bonuses separately to build up a good pot in the intervening years, as I plan to sell and move in 2027.

Nothing. Fixed at 2.2% until 2029. Currently at 28% LTV.
Switching to a new 5 year fixed term at todays rates would increase our monthly payments by about £150 which we are fortunate to be able to absorb without giving it a second thought.

We've been on 0.99% for the past two years, about to come to an end :( we've been paying double since the beginning anyway. The positive of the new awful rate is that it means our double payment is the new minimum, so we won't feel the effect immediately, but won't be overpaying.

We are overpaying a bit & saving some, fix ends in 4 yrs.

Numbers (%, monthly amount) and dates very similar to us. I’m not worried as it’s so far off rates could go down a bit from where they are now. Plus we’ll be done with our nursery fees by then for Dc so we could use that cash to pay extra on mortgage if we have to

It was 10 years. Took out the product in the first half of last year. At the time rates had started increasing from their ultra ultra low position (they'd previously been below 2%) due to the war in Ukraine, but it was well before the omnishambles that was the truss mini budget. We were very fortunate with the timing.

Is this a 10 or 15 year deal? I'm thinking it must be 15, as you would have been unlikely to have been able to fix so low last year.

We did really well as well and got 1.97% for 10 years until mid 2023. We managed to complete in the midst of the Liz Truss fiasco! The mortgage broker was trying to talk me into a 5 year deal at the same rate but I'm so glad we fixed for 10 years as it's a bloody huge mortgage and a long term.
Currently we have maternity leave and nursery fees but keeping aside savings where we can. Makes much more sense to put into a high interest account to get 5%+ rather than saving only 2% although we need to ensure that we are disciplined and don't touch

The first paragraph here was a quote to another poster, sorry not clear!

8 months left at about 1.9% and been overpaying, paid off 6500 extra in 14 months, we have about 99000 left but only about 15 years due to my husbands age

If they was me, I've answered above. 10 years.

I bought in 2022 as a ftb. Rate is 2.45%. Thankfully I ignored friends and family who told us the rate was huge and we should do a 2 year fix and instead went for a 5 year (slightly kicking myself that we didn't take a 10 year).

Our house needs work so we're doing the work rather than overpaying (we save but the savings are being spent on fixing the house). We should be able to get everything but the bathroom done by the time we need to remortgage.

I'm not too concerned about negative equity, a higher rate will suck but we should be able to afford it (I'm PT now so could increase my hours. I can match DPs salary if ft) and the house should be nicer and am happy to stay long term. We've been quite fortunate, if we had taken a 2 year fix we would have really struggled to do any work to our house.

Sort your quoting out 😜

I asked the original "was this a 10 or 15 year deal" question.

Thanks for answering (both of you). Good fortune. It's nice to hear that not everyone has been screwed over!

For the people that have 3, 4, 5 years left - are you expecting the interest rates to be lower than they are now?