Hi all. We're on a 4.99% fixed with three and a bit years to run. Early redemption charges step down each year, in a few months with three years to go they would be 4% of the original balance, so approx £9k (after that they are 3% and 2%)
Doing some rough calculations, it seems that paying the redemption charges is not a crazy idea, but obviously it depends on a rate low enough to offset the £9k charge. I don't think i've got the calculations quite right yet, so wondering if anyone knows of any spreadsheets to help - I know there are many that compare two mortgages, but what I really want is something that turns the calculation round a bit and says 'if you can get a rate of X% with fees of £Y then it makes sense and will save £Z over three years'.
FWIW about £125k equity in the property and roughly 60% LTV, no adverse credit issues. Total mortgage is about twice joint (pre-tax) income. We are overpaying £500 a month and goal is to pay off mortgage as fast as possible.
Any ideas? Thanks.
Doing some rough calculations, it seems that paying the redemption charges is not a crazy idea, but obviously it depends on a rate low enough to offset the £9k charge. I don't think i've got the calculations quite right yet, so wondering if anyone knows of any spreadsheets to help - I know there are many that compare two mortgages, but what I really want is something that turns the calculation round a bit and says 'if you can get a rate of X% with fees of £Y then it makes sense and will save £Z over three years'.
FWIW about £125k equity in the property and roughly 60% LTV, no adverse credit issues. Total mortgage is about twice joint (pre-tax) income. We are overpaying £500 a month and goal is to pay off mortgage as fast as possible.
Any ideas? Thanks.