To ask what the heck to do with our mortage

[Cheeseandcrackers86]

I know this subject is being done to death but arrrrgh! I'm so confused. We are on a decent fixed rate and can switch to a new one at the beginning of November. If we buy out of the current rate now we'd incur a £1100 fee. It's obviously not too long to wait but anything could happen the way things are going... do any budding economists have any advice what we should do? Even at the current rate our repayment would go from about £480 a month to £620 a month... scary times :-(

You should be able to secure a new switch rate now, who are you with?

Sorry didn't make myself clear. The fixed rate isn't up til March. November is therefore the earliest we can switch penalty free. We're with Nationwide

I see, you need to find out the redemption penalty and take it from there.

I have checked! It would be a £1100 getout fee as per pp. My options are either play chicken with Nationwide until November and hope there's a decent deal when the time comes or take the hit now

We took the hit last week. If we'd waited until this week we'd be paying an extra 1.5% on what we locked in. I'd just get it done asap tbh, you're only going to lose out by waiting.

For £1100 I'd get out now

People keep asking this type of question without numbers.
Despite nothing ever being certain, I think we can assume that rates in November won’t be lower than today.
So work out the additional cost of the full term of the mortgage if you switch now, factoring in the fee, for different interest rates.
Even if you calculate that you’ll lose by switching early if the rate stays the same - put a £ value to that.
You might find you’re dithering over a £100 loss and feel that £100 not to stress for the next 6 months is worth it.
There’s no good answer without real numbers.

I think I've given quite a lot of detail tbh. I've said what the remortage payment currently is and what it will go to. The problem is we don't really know what the cost difference will be because we don't have a clue when the interest rates will go up again. That's kindof the point of my post

Nobody knows for sure. Its looking like rates will continue to rise so it might be worth it. I'm no economist though, strangers on the Internet aren't the most reliable for financial advice!

If you want some help you need to provide more details. Obviously you don't know much about mortgages and that's okay, we can all help you learn so you're prepared for the future.

What's your outstanding balance? How long is your mortgage term? Do you know the loan to value (this is a percentage figure which expresses how much of your house's value you borrowed, so on a 500k house, a 350k loan is 70% LTV.

What is your current interest rate, and what's the new rate you'd be paying with the new higher payment?

Have you asked them when you can actually move to a new fixed? Asking as I switched my nationwide mortgage in the summer. I'm pretty sure they said the earliest I could switch was 3 months before (I think!)

Nobody knows what will happen in the coming months.

If the security of knowing what you will be paying for the next fixed term is worth £1,100 to you then go for it.

You might win you might lose the gamble, but you will have the security of knowing what you are signing up for is affordable and you can stop worrying about it.

Also if you decide to get out now get something booked in ASAP as you will need to do it over the phone rather than online (due to you switching before the fixed term runs out). I had to wait a few weeks for an appointment and I imagine they are mega busy at the moment.