Remortgaging question/advice - NR to what/where?

looster

hi all - been reading lots of other threads but can't quite get my thinking straight on this.

We currently have a Northern Rock mortgage on a fixed rate of 4.79%, runs out in Feb 09 and we would then revert to their SVR if we didn't change providers.

In brief, I am trying to decide whether to fix a deal now or nearer the time - I am aware this may be a little early (some deals only available for completion within 3 months for example) but the main issue is that we are close to 90% LTV so if house value dropped, we may find ourselves not able to remortgage. NR SVR currently would be just about affordable - but am not inclined to stay on it given that recently even if there has been a base rate cut, NR have made v little reduction in their SVR.

I am currently on maternity leave but returning to work in March 09, however I understand the providers look at position if I was not on maternity leave. Salary multipliers are not an issue according to broker therefore.

Our mortgage is currently £379K and the value of the house approximately £440K (perhaps a tad on the generous side?). There is some leeway still as if 379K = 90%, 421K =100%. Houses in our road are simply not shifting so there is the risk that someone will get desperate and accept a really low offer - will that devalue the rest of our houses?? Most recent sale at moment is £455K in April - our house in slightly better condition but local estate agent thinks unlikely to get that much now.

Our broker has found a fixed rate mortgage that we can reserve now - Nationwide - either 2 or 5 yr fixed. The rate is 6.58% - that increases our monthly payment by about £500 but is a better prospect than NR's SVR (and I will be back at work by then so we could afford it if we stay on interest only). I think the set up/reservation fee is £599. We can also overpay by up to £500 per month I think which is about the max we are ever likely to be able to do (unlikely to have lump sums to plough into the mortgage).

Could I reserve this rate now and just forego the reservation fee if better deals were available to us in a few months (assuming it stacked up overall to do so)?

Also, should I be looking at 2 yr or 5 yr? The cautious bit of me thinks 5 - given that I'll have to pay greater fees otherwise and also don't want to go through this worry again in 2 yrs. Another bit of me would hate ot be stuck on a high fixed rate if interest rates drop!!

So another possibility I guess is a tracker or a discounted variable? Any views on this?

Husband leaves all this type of financial things to me. He doesn't fret about things but the thought of paying 15% on an SVR freaks me out!! :eek:

Many thanks in advance
Looster

silvercar

easyfinance, if you are a broker you need to say so in your signature. See the thread here:

http://forums.moneysavingexpert.com/showthread.html?t=325378

for rules for brokers on this board.

minimike2

Already tried to tell easyfinance this. Doesnt seem to listen.

looster

I'm not easyfinance or a broker - but I do have a broker. anyone got any views?
thanks
looster

minimike2

easyfinance responded to you post looster - the post has been removed because it breached the posting rules for brokers.

looster

I see - that makes more sense now!

Looking forward to hearing your views...

L

lotto-dreamer

I can't really offer any advice (I have my own dilemma) but as far as Northern Rock is concerned they have written to me about an alternative mortgage because my fixed rate is coming to an end on 31st July.

They have advised because they are under 'temporary public ownership...it is their intention to reduce the size of their business...'

They have said if I don't want to go on to their SVR (7.49%) they have a special arrangment with C & G and they will make moving from NR to C & G as easy as possible. Unfortunately the rates also include 'product' fees of £995

The fixed deals offered with C & G are from 2 years at 6.44% to 7 years at 6.29%.

I am assuming when your fixed rate deal comes to an end you might get a similar letter. Perhaps you could call and ask them?

looster

that's interesting to know - I will give them a call. Thanks for letting me know!