Help - I need a new mortgage

Q I have just finished a seven-year tie-in mortgage with Britannia (never again). During this time I divorced and am now looking for a mortgage with a fixed rate over two years, no redemption fees or large initial costs, as I have little capital (and three kids to feed!).

I am finding the whole business a mine field with little time to spend shopping around. I want to extend my mortgage to 18-20 years, with repayment only. I lost the endowments in my divorce settlement. My mortgage is for ?48,000 and my monthly repayments are currently ?334.00. I would ideally like to keep the repayments about the same. Am I being realistic?

M

A First the bad news: you will be extremely hard-pressed to find a fixed-rate mortgage which doesn't charge redemption fees if you pay off the whole mortgage during the fixed-rate period.

However, judging by the best buys given by Moneyfacts, it is perfectly possible to find a fixed rate mortgage which won't charge a fee if you repay your mortgage after the fixed rate period is over - although the number of two-year fixed-rate deals is limited as most fix the rate for longer than this.

And unfortunately, fixed rate deals which don't have an extended tie-in tend not to offer the cheapest rates.

Possibly more bad news is that you are also highly unlikely to find a fixed-rate deal without the initial cost of an arrangement or booking fee which varies from around ?195 to as much as ?495.

The good news is that your plan to extend your mortgage term to 20 years and to switch from interest-only to repayment while maintaining the level of your current monthly repayment of ?334 is perfectly realistic. And finding the mortgage deal that will help you to do this - and possibly even reduce your mortgage costs - could be relatively painless and not very time consuming if you were to consider using a no-fee mortgage broker, examples are Clear Cut Mortgages or Purely Mortgages to do all the shopping around for you. A broker should also be able to advise on whether a fixed rate deal is the most appropriate type of mortgage for your circumstances.