To pay a £7K exit fee now

[millymog11]

For my fixed term mortgage on 1.9% expiring 3 March 2024 (i.e. 18 months to go) in order to get a 10 year fixed at 3.8% with a different mortgage provider which will basically pay off my entire mortgage and also consolidate my small home improvement loan?
£7K seems steep especially as I have 18 months left on my current fixed but my current fixed mortgage provider (Santander) has TOTALLY shut down its website page which, until 48 hours ago listed their other mortgage deals and I waited 55 mintues on their call helpline at about 5pm last night before giving up and putting the phone down.

(Single mum sole earner, two teenage kids live with and depend on my 100% of the time) , cannot afford to default on my mortgage, need certainty of mind, what would you do?)

Personally I wouldn’t. I’d take the risk that things will be more settled in 2 years.

@millymog11 sorry missed this, the absolute latest I think is Jan 25 but it feels like it can’t go on without one for much longer, there’s no mandate whatsoever for this lot or their god awful policies and people are getting angry. Hopefully a seminal poll tax type moment coming.

don’t get me wrong it won’t be instantly rosy under labour particularly inheriting this but they will care about people like us not just the top 1% so it can’t really get worse based on that

Carla2601 · Yesterday 22:29 thank you so much for this. I kind of know these things but when this "mini budget" type situation hits all normal recall on things like then next GE goes out the window.

Thank you so so much to everyone who posted on this thread. You might think I am being sensible, or you might think I am being hysterical, but either way I am really grateful for your views.

I am going to spend some time talking to

• lloyds on my pre booked video call tomorrow at 16.00pm - he will probably tell me all the deals I looked at on Tuesday night have been pulled but it is probably worth the conversation
• as predicted Legal and County called me and left a message when i was cooking dinner last night after I filled in their online call so i might call them back to see what their take of the market is at the moment
• as lots of people have suggested, until i have consolidated my £14K home improvement/double glazing fitting loan into my mortage i should probably focus on that and then building up some reserve for when i end up dropping onto variable rate in March 2024 if i have not re mortaged by then.

Really kicking myself now that at the end of my divorce i did not insist to my financial adviser i wanted a 10 year fixed instead of a 5 year fixed mortgage in December 2018. I did have that conversation with him as I am an ultra cautious kind of person but he spoke to me like i was a crazy woman as there were such good rates about at that time and he said "who knows what will happen in 5 years you might want to move to a bigger house?"

hahahahaha

if i can just keep the one i am in (which I love and is fine for me and the two kdis) I will feel really grateful and lucky! (its actually not that small but it is in one of the most expensive parts of the country unfortunately (all thanks to my ex husband) so lets just say it is the "right size for keeping the heating bills down silver linings and all that!)

There are lots of excel spreadsheets available online that do the calculations for how much you'd pay at different interests and different overpay scenarios. I'd do one for your current mortage and then estimate an exit rate - I try and do 10% as that's what hopefully worst case would be and 5% as a more realistic estimate. Then do the same with the 10 Yr fixed plus exit fee.
You can then directly compare what exactly you'd spend on the 10 year fixed and with the current mortage.

Then focus on clearing that - I assume no penalty for early repayment ? (check this).
As your mortgage rate is so low I'd consider taking out a monthly paid cash ISA and pay into that each month rather than pay off your mortgage monthly - you need to look for a rate higher than your low 1.9% mortgage rate - you may find these increase especially if you leave it a month or two, and the interest is free of tax. I quickly googled - this isn't the best rate I'm sure, but found Yorkshire do a fix for 1 year at 3% interest - so your payments each month will earn 1% more than it will paying off your mortgage.

Then when it matures, you pay the lump sum off your outstanding mortgage balance - do check the best time to pay off a larger lump sum, it may be that you hold till the renewal to give you the greatest benefit.

You would have to have the £7k upfront in a debit card to make payment and progress the new fixed-rate.

We've just fixed and paid an ERC and the system only accepted debit card.

I've been offered a 3.8 on a 10 fixed year deal.
But it might be because I have been with Llyods since 1985 and I have got my kids onto their child saver.

Who knows it might not be that good a deal. The paperwork says I can accept or reject until 28 February 2023.