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Temporary repayment before remortgaging

neversay
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Temporary repayment before remortgaging

#94147

Postby neversay » November 8th, 2017, 4:04 pm

We are currently on a 2.59% mortgage and have £80k of cash savings ready to build an extension which we plan to start after we have remortgaged next June (we don't need to borrow more). I have been mulling temporarily using £17k of the extension fund to pay-off part of the existing mortgage (maximum lump sum allowed) and get a notional 2.59% return on the savings for a few months, but then we would have to remortgage it out again. Is it a better idea to forget this plan and instead go into the remortgaging with our existing loan amount?

Thanks.

Maroochydore
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Re: Temporary repayment before remortgaging

#94224

Postby Maroochydore » November 8th, 2017, 10:26 pm

My take is that as mortgage rates are starting to rise you will have to pay a bit more to re-mortgage thus losing any benefit gained on the interest over a few months.

You'd make about £36.70 per month gross but if you left it on instant access you'd get say £17 per month so you have to weigh up the risk for a net £20-ish per month.

For three months you'd make £60, is it worth it?

neversay
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Re: Temporary repayment before remortgaging

#94226

Postby neversay » November 8th, 2017, 10:29 pm

That's a good analysis and great answer. Thank you!


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