Up my mortgage repayments?

C

Crubeens

Guest
Advice needed!

I'm just about to go in to my second year on a 2 year fixed mortgage at the rate of 3.99%. I have 202 out of 240 months left of repayments.

On my current salary I can afford to up the repayments while the interest rate is pretty good. WOuld you advise me to stretch my salary and increase monthy repaymnts until the end of the 2 years?
 
If you are on a fixed rate then you cannot accelerate your repayments without incurring fixed rate breakage penalties in most cases. Ask your lender or check the terms & conditions of your mortgage agreement to see what penalties might apply. No such penalties would apply if you were on a variable/tracker rate and accelerating mortgage repayments in this way is generally a good way to save on the long term interest costs of a mortgage. Use Karl Jeacle's mortgage calculator to estimate the potential savings. Why did you fix in the first place if you were most likely not under pressure with the repayments?
 
Thanks for that. To be honest I just like the security of knowing what my repayments will be over a decent period of time.
Also, the interest rate increases were coming by the trolley load so I thought fixing might save me a few quid over the course of a couple of years.
 
In my opinion you should only fix if you are under pressure to meet the mortgage repayments or would be if rates increased by a few percent and certainly not in an attempt to save money over a competitive variable/tracker rate. In addition as you have found out fixed rates are inflexible. Ask your lender if they would charge or waive any penalties if you decided to make accelerated capital repayments. If the will not waive any penalties then you will just have to wait until the fixed rate period is up before making accelerated repayments.
 
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