Is this small change in grand scheme of things?

[dani_l 0]

Hi all - great to be here!

I have a dilemma. I signed up for a 2 year remortgage fix at the start of November (too late to get out of cooling off period). I have an outstanding balance of £55,000 on my mortgage on a house worth around £280,000. 

I want to remortgage to release the equity, however, the penalty is a psychological blocker for me (2%). So I would have to pay £1,100 penalty. Like most probably I am averse to paying avoidable charges, but I know obviously sometimes this is inevitable. The rate reduces to 1% penalty in year 2 of the fix.

What are your thoughts - is this small change, or would you wait, continue to aggressively pay down the outstanding balance to potentially get a lot more equity out in a year or 2?

My plan with the remortgage funds are to part put into property bonds, part buy a flip property, part buy a holiday home.

What do you guys think - would you think nothing of the penalty and do it now or wait?

Thanks

Dani

[taxantics 41]

You could just take out a second mortgage or if the lender is willing to lend you more, they may waive the penalty if you stick with them and do a new deal. You’ll still have an arrangement fee. I’m assuming the rate is good on the current mortgage so there might not be a massive driver to disturb this lending apart from maybe second mortgages being more expensive because the lender will only get a second charge. Good luck!