Changing mortgage this month - advice on options?

[Z100]

Hi,

The fixed rate on my mortgage has expired so my lender, Ulster Bank, has sent me my options with them -

Option 1 - Flexible mortgage: 4.2%

Option 2 - Fixed rate mortage: 5.0% until 30/11/2011

Option 3 - Standard Variable Rate: 4.74%

I know there are dozens of posts on mortgage matters on these boards so before the mods leap in and tell me to read them......I have! But I'm completely clueless when it comes to understanding this stuff so was hoping for a couple of nuggets of personalised advice from an expert or two out there.

Incidentally, it's possible that I will have to sell my house in the next few months because of personal (non-financial) circumstances, but I'm hoping, for now, to hold on to it.

So, the fact that I can make overpayments on the flexible mortgage appeals a lot, but the fixed rate is attractive too on the off chance that I hit hard(ish) times.

Generally what would you experts advise in this situation? I understand much of this is a gamble, but would really appreciate your thoughts.

Thanks.

 

[Ravima]

fixed rate is fixed for the period. If you sell the house, you will probably have to pay a penalty to bank.

maybe in the circumstances, you should stay variable and review in a few months when a decision is made on the house sale?

 

[PM1234]

As its short time - stay on variable and think longer term on new property to avoid penalties for breaking out of a fixed.

 

[Z100]

Many thanks for the replies, looks like variable is the way to go in my situation - thanks again.

 

[irishlinks]

What about the flexible? Why have you written that off - the rate seems good and the ability to over/under pay was a bonus you said.
You may want to check NIB - their LTV mortgage might be better for you especially if you have a mortgage less than 80% of the value of the house. Also - check with any lender that if you move house - will the lender allow you to take up a mortgage on the new house without any penalty?