Really worried but partner doesn’t agree :(

[Hiyaaa1245]

We are on a tracker mortgage which ends next year.
But we can lock a new one in 6 months prior so potentially could lock it about December time.

I want to just pay the early repayment fee of £6000 and go into a fixed product now but partner want us to wait until December.

im worried that by December rate will have gone up even more !

any advice please ?

It depends how big your mortgage is, the time left on your mortgage etc. do you think you’ll have to spend over £6000 in interest repayments over the next few years at that sounds a lot. I think you need to provide some more context if you want some advice.

I would do it now. Interest rates are going to have to rise again.

Speak to a mortgage broker. They can advise and will be impartial.

This. Just work out how long it would take to spend £6k more on what you expect the interest rise to be.

I sought advice on the same issue and we decided not to do what you’re suggesting.

ours is up in august so we could lock in a new rate from Feb or we could pay the fee (£10k for us) now and fix. Our advisor said that instead of doing that we could just extend our term in the event of a rate rise to keep our monthly payment the same. It would only be temporary as if rates come down by the time we’re fixing again (in 2/3/5 years) we can reduce the term again or overpay to get back to where we were.

im of the opinion that our aim is to survive the next 5 years financially and if we have to take a bit of a hit in the long term to survive the short term then so be it.

When does the fixed rate end? You need to contact a mortgage broker, they can book a rate for you a little over 6 months with some providers.

Speak to a broker, also see what your current lender is saying. In the past, I've occasionally been sent offers to move product early if I stay with current lender.

6k is a lot of money to pay out at once!

£6k is a BIG early repayment fee. My fixed ends on a similar timescale to yours and I've been considering the early repayment fee but mine is only £1.5k.

Since when did tracker mortgages have a £6k exit fee? I thought it was only fixed rate mortgages that had an early exit fee? Also even with fixed rates you pay much less for an early exit the closer you are to the end of the fixed period...

Thanks all.

I didn’t think of the possibility of extending the term. 6k is a lot and it’s ALL of our savings atm :(

I think it’ll take 18 months for us to pay 6k equivalent in interest.

@SeptemberFriend I am of the same thinking . What to fix and survive the next 5 years.

I have generalised anxiety and this situation is just really difficult for me to cope with.

I didn't think tracker mortgages had exit fees. We've just moved to one specifically as we're selling the property. But ask a broker or your own mortgage provider

Call your provider first to explore options before deciding anything. The 6k fee may not apply if you port to another product with the same provider. What is your current tracker rate? How many years do you have remaining on your mortgage? Review your options before making a drastic and costly change.

Very unusual for a tracker to have an ERC

Can't see it being worth paying 6k for the sake of waiting just over 2 months.

Your lender potentially can calculate for you the cost of switching now and if its worth doing so based on the ERC. When I worked for Nationwide we had a system that did that for us and we could share it with the client to show them in black and white the cost comparison. Maybe try that first.

Mortgage offers last 6 months, get an offer now to change in December x

Just re read 🙈 sorry! That's a tough call, maybe have a chat with a mortgage advisor x

I can only say we’ve just HAD to fix again for 5 YEARS we could afford the 2 year fixed deal as was almost double our current payments 😩 I would wait and see it can’t be much worse than the 4% we’ve just had to go for taking our payments up over £300 a month, people will be losing their homes lol over the place if this continues as combined with the utilities rising exponentially realistically how many can afford 40% total raised to their monthly outgoings..,it’s using up all our disposable income.

Sorry for the confusion.
We are on a discounted variable product. It’s a 2 year term so has early repayment charges.

Can someone tell me, if the Band ok England raises its base rate to 5% (from the current 2.5) how will the effect our mortgage rates ?

How much is your mortgage, your current rate and outstanding term?

If you ring your mortgage lender they will be able to tell you whether it’s worth paying the 6k vs their best fixed rate. I’d be surprised if it is unless you have an exceptionally large mortgage. Especially for the sake of 2 months.
I used to work in mortgages (existing customers) for a large bank, we were able to waive up to 20% of the early repayment charge if you were staying with us IIRC so it may be worth asking the question. It wasn’t something we offered up front you had to ask.
Nobody can tell you what the rates will be by December, but would certainly expect the base rate to rise to somewhere near 3% at least by the end of the year.

How much is it likely to go up to? Work out what your repayments will be, and if the rates go up further.

When we came off a fixed rate our interest rate came down. Still only paying two point odd percent, even with recent increases.

£6k is a lot to make up for in interest. Find an independent mortgage advisor, they will be able to advise you as to what's available and how much the rates will need to go up to make it worth while. You can then make an informed decision.

We're in a similar situation - 5 year fixed ends in May. Our exit fee is £11,600! (unlike some other banks who may lower the exit fee over time - so you pay less to exit with one year to go, than you would for four, for example - Santander is known to keeping their exit fees high. Definitely a lesson learned moving forward - exit fees will be one of the main things I consider from now on, when foxing.)

We spoke to a mortgage broker back in July, and he did the sums, and advised us to not fix then. With the high exit fee, and what the new mortgage payments would have been (higher percentage than we currently have, obviously), it just did;t make sense - he advised we saved the difference - which we have been doing since July (least it's going into our savings, rather than interest to a bank).

He also said that (at that time) banks were offering higher percentages than the BoE was rising the interest (so a lot more than beyond the 1% higher than BoE rate) - supply and demand. Lots of houses being sold at the time, meaning more mortgages being taken out, and lots of people were panicking and looking to remortgage earlier than expected (as we had). He expected it soon to filter down, as less mortgages were being taken out (which yea, I know will be cancelled out by BoE rises before then, but in theory means we'd be looking at similar percentages as we had in July).

He also said we can arrange a fix up to 6 months in advance - get it agreed etc, but see how the interest rates/new deals go in those 6 months. So we're meeting with him in November, and will lock in a rate then, but come April next year, if we get a better interest deal then - we'll take the new deal. A decent broker should be able to do the same for you around December.

Right, so you reckon it would take 18 months at current rates to equal the 6k early repayment fee, and you can re-fix in December which is 2.5 months away?

I am not a mortgage broker and I am not very good at compound interest either, but on the face of it, that would be crazy. You've only got 2 payments to go. Get on the phone to a broker (L&C are great and free), phone your own provider (who will be keen to keep you) and get a plan in place for December. Action is better than anxiety.