fix mortage and for how long

S

shev

Guest
We have a current account mortgage of 184000 on a variable rate 2.25. We pay 1375 each month and it would be repaid dec 2022 if everything stayed the same which of course will not happen.
Here are some of our details hope relevant:
3 kids under 6, 1 income daddy and 1 stay at home mummy, job never secure contract work but not out of work yet.
Also well qualified. No other debts except mortgage. 17000 in personal savings. 2000 in my emergency fund.
started saving 500 a month last year and planned to up to 1000 a month this year (getting better rate) and worrying about kids education. Ideally would love to have mortgage paid or almost paid by time oldest child starts college in around 13/14 years but also don't want to crack up if out of work. We pay ourselves 4500 each month and get 480 child benefit. Also assume house should worth be 400000. Guy next door asking 600000 last one sold for 620000 1 year ago.

Should we fix the mortgage if so for 5 years or 10 years or not at all?
5 years fixed over 15 years gives us the same repayment we have right now. We are overpaying the mortgage each month 300 so the real term is longer. This is assuming we would get a mortgage.

Hope I haven't put in too much or too little information.
 
Is your current account mortgage a tracker rate, i.e. the interest rate at a fixed margin over the ECB base rate? If so, I'd be reluctant to give that up, as the rate you'll pay after your fixed rate expires is highly unlikely to be as good as the rate you're paying now.

As far as I know, you cannot fix on a current account mortgage without switching to a "non current account" mortgage. So you may incur legal and valuation fees for doing so.

Also - if your current account mortgage is the same as mine, any overpayments you make can be withdrawn if needed, e.g. in the event of being out of work for a while.

Personally, I'd hang on to your current account mortgage. It can also be a good place to house your cash savings as you'd be getting an effective rate of interest of 2.25% on them, which is the same as 3% interest elsewhere as you'd pay 25% DIRT tax elsewhere. Not the best deposit rate in the country at present (see Best Buys on Askaboutmoney) but not bad and helps you towards your goal of paying off the mortgage by the time your oldest child starts college.
 
Thanks so much for replying I checked the documentation you are right it says my mortgage will not exceed central bank by 1.5 % and we can take out money if we need to. Also yes I would have to completely change mortgage to fix. Thanks so much again replying.
The last question I have is that I did read that you shouldn't have your savings in same bank as your mortgage but I should still not change the mortgage right... Especially as I read what is says below again in the other thread about trackers and I shouldn't fix
Thanks again
 
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