Can someone advise on remortgaging?

[IlFaitBeau]

We have a two part mortgage on our house (ported mortgage from previous house) which means Part 1 (higher amount, lower rate) is expiring from fixed rate in a few months, and Part 2 (the additional borrowing for upsizing we took out, for lower amount and higher rate - which we are significant making overpayments on monthly too) expires fixed rate next year.

Our options as I see are : when Part 1 fix expires soon we stay with same lender for what appears to be a higher interest rate.

Or - pay the small 0.75% penalty on part 2 for early repayment and just leave current lender and search whole of market for remortgaging entire thing with another lender. Compare the market says this could bring down monthly payments by £300 given current value of house and our equity:loan ratio. This 0.75% penalty on Part 2 is less than £1k.

Am I right in thinking that it’s better to just pay the 0.75% early penalty on part 2 and get a competitive remortgage ?

Anyone?

Are you looking at the svr on the mortgage? That will be high once the fixed rate expires.

Have you checked the deals to remortgage part 1 of the mortgage with the same provider?

I think you are probably right that the penalty 0.75% early repayment charge on part 2 is probably worth paying - if your new rate is below 0.75% less than your current part2 rate then you aren't losing any money at all in the long run.

I would suggest though that you check the remortgage rate deals for existing customers at your current part1 lender. These deals are often reasonably good and whilst yes you might be able to get a 0.25% lower at a different supplier, it's worth considering whether the additional hassle of changing lender is really worth it. We have been with the same lender for over a decade now just transferring to a new fixed rate deal every 2 or 3 years because the amount we could theoretically save by changing lender regularly isn't worth the stress in my opinion.

I'd go via a broker to find the best deal. We have one we've used for a number of years, but L&C are free and pretty good.
If your house has gone up in value since you bought, you may be able to get a better rate too as your LTV might be more favourable (I used a few recently sold examples from Rightmove to evidence this & our broker got us a better deal based on it).
Ultimately you need to crunch the numbers and see what will save you more over the period.

Speak to a broker. Another option is to REMO product 1 onto a product with no ERC, then REMO the lot competitively next year onto one product.

How many months left on M1? Usually they send you out a new offer 3 months before the existing one finishes.

L&C is free & often recommended on here, it's worth speaking to them at least.

See what the rate is compared to the rate on M2. I'd definitely look at combining them.

I'm staying with my bank as I can't be arsed with going through all the paperwork etc, but if you have 2 regular jobs & you can get a much better deal, it would be worth it.

My biggest drama was deciding how long to fix for because I might have to sell & go overseas or rent it out & rent there (and I know my current lender will do that easily)

Look at the costs for the next 12 months by carrying out each option. Without knowing the exact numbers no-one can advise you accurately. But on the figures you've given, paying the exit fee seems sensible.

Thanks all.

Forgot to say but have spoken to current lender and looked at their rates but basically it would mean - Part 1 (large part, expiring FR soon) moves to a slightly higher-than-now new Fixed Rate, and Part 2 (Smaller part, higher rate) continues to be fixed for another year at a higher rate.

Thus - it appeared/s to be a no-brainer to just move the whole lot to a modest rate (Which we have found). And yes, pay the £900 ERC en route out. Monthly outgoing decreases by around £262-£300 a month if doing so.

You are correct. Better to take the hit now whilst you can still fix for 5 years on a good rate with another BS. Every month now I think BoE will raise base rate because of high inflation. I can see base rate going up to 4.5-5 percent by 2023.

Every day more mortgages are being withdrawn from market and replaced by higher interest options. Do it sooner rather than later.

In the past I paid a penalty to leave because I found a really good rate with a different BS. It does not affect your credit rating as you are in effect paying it off.

I did this in December. My 2 parts were never going to sync and I'd need to go on SVR rate for 15 months to avoid ERC. Just taking a massive hit to lock in the 5 year fixed rate. It did take 2 months to get the mortgage offer given the volume of applications. Do hurry.