I have only £40000 left on my mortgage and i am about to renegotiate my next offer. In england i am about to be offered a fixed 5.9% for 5 years .The payments would be around £320 a month but i would only be allowed to over pay a small amount. But i really want to overpay each month up to £800 and then i would be on a higher variable rate up to probably 7% as opposed to saving this money. Is this a good idea?

Explain your note as it exists. I don't understand pound terminology. How long do you have on your current note and how much are you paying on it?

How much cost is there in your refi?

If mortgage rates in England are falling, stick with a variable. If they are rising or treading water, get the fixed. Since you can't overpay much monthly or yearly, take the lower rate. It will be something that you can count on. World markets are too wobbly right now due to commodities' fluctuations.