Hi Sharon,

Most of the high street banks at the moment aren't lowering their deals regardless of rate changes and some in fact have increased their rates. The only way people are benefiting from rate cuts are by opting for tracker mortgages.

Have you considered putting the whole mortgage on interest only for a period of 5 years until you have increased disposable income?

If I was you, I'd avoid the stress and hunting by speaking to an independent mortgage broker but use one where there is no fee. The mortgage broker gets paid commission by the provider. Its also very likely you'd get a preferential deal through a mortgage broker.

2 sites are good for finding financial advice (both free) - www.unbiased.co.uk gives you a list of advisors in your area and Moderated XXXXX is a free service getting you the most specialised Independent Financial Advisor to you for a free consultation.

Both well worth a look and don't stress about it as a mortgage broker will find you the best deal. Let me know how you get on with them.

Best of luck!

Going part interest only/part repayment is probably a good* tactic to tide yourself over a hike in payments.

However, the size of mortgage you have makes it worth considering a 2 or 3** year deal so that you are not accidentally on the interest only bit for too long.

In your shoes, i would certainly consider the option of taking a deal that tied in with the 'kids out of the way' moment - that will be a very good moment to completely reassess the mortgage to suit your new circumstances.

Statistically as well, it is very risky planning to overpay - I saw figures that stated that about 2% of people who plan to overpay actually do - I would avoid joining in with that statistic if I were you.

Hope that helps

Adrian

*Good - meaning 'least bad' - no point having an unaffordable mortgage, so while interest only is generally a bad thing, it's better than struggling.

** not necessarily lower rates - but possibly most suitable. The 5 year fixed rate is lower becuase HSBC predict rates to fall - they are in it for profit, and the get out clauses are steep.

My current mortgage deal ends at the end of March. I have been looking for another deal for at least a month now, hoping that the rates would come down.

I am on a deal at 4.39%, paying £1085.47. The smallest increase I can find, without incurring a huge application fee, is Direct Line at 5.29% for 5 years.

This would be an increase of £106.62, to £1191.62 for a £189,000 mortgage.

Would it be silly to go for £139,000 on repayment and £50,000 on interest only, for the next 5 years, making our payments only £1098.50.

We are quite tight for money at the moment, paying school fees, but hopefully these will come to an end in the next 2 years, which means that when we change our mortgage next time, at the end of the 5 year deal, we could revert back to having everything on a repayment mortgage.

Also, once the kids fees are out of the way, we could make overpayments during the 5 year deal, which would lower the £139,000 more quickly.

I am thinking this out right, or should I forget the whole thing, put it all on repayment and struggle?

I am panicing now, as I only have a few weeks to sort it all out!

Many thanks,

Sharron.