would it be worth swapping fixed to variable even including penalties? but more to the point how are lenders dealing with the self-employed? I secured our current mortgage on a self certified basis but its all changed now hasn't it?
in our favour we have about 45-50% equity and our credit rating is excellent

In all probability it won't. It will greatly depend on the size of the mortgage (in this case the bigger the better) and the size of the penalties involved (in this case the smaller the better). But as you are self employed and need to self certify your mortgage (assuming you don't now suitable accounts) and your credit rating isn't great, I would imagine it is unlikely you will benefit from a rate switch.

That said, without looking into your situation in more detail, I can't give a definitive answer. So I recommend you contact an independent mortgage broker who will be able to give you a definite answer.

Thanks I think you are right. My wife and I have been doing a little more homework and thinking about it. what we could save in lower interest rates now would take about 18 months or more to get our money back after all the penalties and setting up fees we'd have to pay . Plus the market is likely to swing the other way i.e higher interest rates if the housing market recovers which it could do in a couple of years time

I'd agree with Dan on the whole its a fairly straight forward calculation to do and it soulnds like you've sorted it through yourselves but just for anyone else that might look on here. below is a pointer to how you can work this out.

If you leave a lender while still in a fixed rate deal there is normally some kind of penalty, details of this should be on the offer that you will have been given when you took out the mortgage, this is the first piece of information you will need to decide if its worth moving.

Once you have established how much it is going to cost to leave you will need to have some idea of how much you will save with the new deal, most lenders now have a calculator on their website that will allow you to work out what payments will be on a mortgage so go to them and have a play :) put in the size of your mortgage the term you have left and the rate that you have seen.

see what your new payments will be compared to your current payments and just work out the difference between the 2. if you multiply this by the number of months left with your existing deal that will tell you how much you can potentially save.

there will however probably be other costs involved in setting up the new mortgage! so these will also need to be taken off the saving you may make but at least you will be able to get a reasonable idea if its even worth looking into.

All good points.

However as for other costs, you may well be able to get away without any. Lots of remortgages come with free legal work & a free valuation which are your two main costs.

Do note that as well as the early repayment charge from your current lender, you may also have to pay a deeds release fee or an admin charge to close the account which can be a few hundred pounds depending on the lender and this also needs to be added in to your calculations.

Hi,

There is a lot of debate at the moment in regards to what will happen to the Bank of England _base_ Rate and what's best for you will very much depend on your personal circumstances.

The first question you need to ask yourself is, how important is it for your Mortgage payments to remain unchanged? - Do you have the spare income to cope if the rates start going up?

As to whether it is worth changing, you will need to add up exactly how much it will cost you to change so include any early redemption charges, any admin fees charged by your lender and any set up fees for the new deal you pick. Now you have that figure, you will need to work out how much of a difference the change will make to your monthly repayments. Once you know the difference between what you are paying now and what you would be paying, you can simply divide the total cost of changing by the difference in your monthly repayments. The resulting figure will be how many months of being on your new deal it would take you to make back what you have paid out to get onto it.

In regards to your being self-employed, as long as you are not looking to make any other changes other than your Mortgage deal (eg, no additional borrowing, change of term or repayment type) most lenders will not require proof of income. If they do require this proof, it is now usually two years full accounts or tax returns

The above is by no means the only consideration, it is just a start, but I hope this helps

Best wishes

Sean
http://www.ifacompare.co.uk/