Mortgage advice needed from anyone good at finance

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I have 110,000 outstanding and it has come off a fix, so interest is 7%!! So high.

i can afford it but hate seeing paying so much interest. I was not going to fix because I should be able to make some large overpayments - maybe £2k per month. Bit if I fix the interest rate will be much lower and I could put the money aside for later. What would be best?

thank you

It would be madness not to fix. If you want to make overpayments, check if your provider allows it or switch to one that does?

Are you not able to fix and overpay? That's what we've always done.

Thank you. That’s helpful. I have done some very rough figures in my head and I think fixing may be the way to go.

Go onto a tracker mortgage with no early repayment charges. Will be lower than 7% and mean you won't get penalties for overpaying.

Look at how much you can overpay without penalty, typically it's 10% per year

Can't edit on my phone- but alternatively, try and get an offset mortgage. You basically have a savings pot linked to your mortgage which you can put money in, which reduces the amount of interest you pay. It's kind of like you have paid it off your mortgage but can still access it.

Once your mortgage is fully offset, you could pay it off in one big lump sum.

This. Most fixes let you overpay 10%. Get yourself onto a cheap rate and then start overpaying.

Look at offset mortgages- you don't overpay directly but put money into a linked savings account. You don't get interest but you also dont pay interest on the amount of mortgage you have the equivalent of in savings.

That way you can easily flex any overpayments, have access to the money if you need it and don't have to worry about overpayment limits.

When you have the equivalent in the savings pot to what is outstanding on the mortgage, they will ask if you want to pay the mortgage off.

They're usually tracker mortgages rather than fixed though.

Crossed post with @Alarae

Thanks all!

I am a highly qualified professional but bad with financial matters. I am actually really good at saving but not making financial decisions….

Can you look at a tracker ? We've got over currently, rate comparable with a fix but it's gone down twice with the base rate decreases. If you can afford 7% you could afford a slight increase should that happen. Ours has no exit fees and no limit on over payments.west Bromwich

Barclays let us overpay 3 times our regular monthly payment per month, plus the monthly amount, which wasn't included in the 10% annual overpayment figure so (assuming our monthly payment was £500 and we still owed £100,000 ) we could pay £2000 every month and then pay off £10,000 just before the end of the mortgage year.

One word of warning, don't take advice from the bank's mortgage helpline - they don't always know best, they could have cost us thousands (and added to their profits) if I hadn't been on the ball

Thank you

Lots of fixed deals let you overpay by varying amounts. If you are sure you can afford higher payments permanently you could also look at reducing the term. Not fixing or opting for a tracker and paying 7% would be insane if your only concern is the ability to overpay. There are loads of options for this.

If you want help selecting and applying for a new deal you can get free mortgage advice. I've used London and Country before and they were good, it was years ago though so you may want to get some more recent recommendations.

We are with First Direct who allow unlimited overpayments. They don’t deal with brokers so you have to go direct.

You're probably best off getting a fix and saving separately if you exceed the free overpayment allowance. Then you just send your savings to your mortgage at the end of the fixed period.

The interest rate could be better in savings or at least nearly as good meaning that you're still much better off than you would be staying on the SVR.

For the love of god - fix.

Fix and don’t overpay if you feel confident you can achieve a higher net interest than the mortgage rate and you are happy to access that cash. Ie withdraw from ISA

we are fixed at 2 . Something which makes it an easy choice. We are banging everything leftover into savings right now which are massively outperforming 2% as when we come off we will prob want to pay down a chunk. Equally it may suit us to keep the cushion and just remortgage

You need to act now to get off this 7 percent. You can get a fix that starts with a 4. Most fixed mortgages allow 10 percent overpayment. If you want to pay off more save the money separately and once the fix is up pay off the amount before fixing it again.

It would be worth looking at either an offset mortgage or one where you can overpay with no early redemption penalties. I had a mortgage advisor who found me the latter and it was great.