Remortgaging - AIBU?

[Sandflea9900]

We are halfway through a five year fixed rate mortgage. We bought out house 2.5 years ago and are mortgaged up to our necks. Although we have a hefty early redemption penalty to get out of the mortgage (which is a really good rate), I want to remortgage now for 5-10 years whilst we can still fix at a rate we can afford.

DH thinks rates will have come back down in two years time and is adamant we should wait. I’m worried that we won’t be able to afford a mortgage by then and will have to sell up and downsize, which may not be easy to do if interest rates are still high and the market slows. AIBU?

Good Lord, no - what kind of rates can you get at the moment? Far worse than what you’re on at the moment, I’m sure.

i appreciate you are thinking about the future, that’s a good thing but it really is a complete crap shoot as to how interest rates will be in another 2 1/2 years. Better plan would be to look at overpaying (use the additional monthly amount you would be paying on the theoretical remortgage) or better still thinking about how you could progress your career(s) in the next 2 1/2 years to earn more. (Hoping that doesn’t sound flippant, as it’s really not meant to be)

A hefty early redemption plus the extra you'd pay for the higher rate may be too large to eat. Can you put the extra money into paying more off the mortgage now or save it / invest to have for when your current deal ends?

Rates will not come back down anytime soon.

There are online calculators to help you work out the costs but your early redemption penalty is likely to be more than any savings made in remortgaging now.

We are in our late 40s so our careers have pretty much plateaued. We can overpay a bit, but our two year fixed rate for gas and electricity finishes in February. We currently pay about £2k a year for this (big house) and we estimate that will increase to about £8k a year, so that will eat into our ability to overpay, and to afford a higher rate mortgage in the future.

I have just done this for 10 years, in April - but:

The penalty was £2k which meant if we thought our next rate would be more than £16 a month more it was worth it.

Remortgage was 1.5 years away, not 2.5 which may very well be a more stable time.

The rate was 2.19% - same as we are on now. No fee.

You're probably looking at well over 3% now right? So I think you may have missed the boat a bit to get the benefit.