Adivce on fixed intrest rate mortgage

red_machenka

Hi all,

We have had a mortgage with Abbey for just over 3 years (which was fixed for 3 years i think at 5ish %), that fixed rate ran out in October of this year... I was so worried about intrest rate hikes, I immediatly set up another 3 year fixed rate mortgage (with the abbey at I think nearly 7%)... But now... shock.... intrest rates have fallen a huge ammount and possibly set to drop again... but now we are stuck in this mortgage for 3 years... of which I must say has caused us extreme financial hardship, our mortgage has gone from £594 per month to £713 per month.

To be perfectly honest we not worried about owning the house at the end of our 28yr mortgage... all we are interested in is paying a lower monthly payment... any advice would be greatfully recieved!!!

JayZed

Information you need to provide:

- What is the oustanding value of your mortgage?
- What exactly is the fixed interest rate on your mortgage?
- What is the Early Redemption Charge on your mortgage?
- Is your mortgage interest-only or repayment?
- What is the LTV rate of your mortgage (loan compared with current property value)?

If you provide this information it will be easier for people to help you calculate whether it's worth you switching to another product or not.

red_machenka

Outstanding balance on mortgage: 107000
Current interest rate is:6.69%
Early redemption: £3516 (ouch)
It is a repayment mortgage
Property value: £150000

feisty1

red_machenka wrote: »

To be perfectly honest we not worried about owning the house at the end of our 28yr mortgage... all we are interested in is paying a lower monthly payment... any advice would be greatfully recieved!!!

Speak to the Abbey re' changing to interest only if this is currently causing you financial hardship, they have to view this with empathy. Changing to interest only is much better than defaulting, you also appear to have yr own plan where you are going to live in the future, if paying the mortgage off is not a priority.

red_machenka

Unfortunatly we do not have any long term plans on where or how we are going to live... PAYING OFF the mortgage is not a priority... but PAYING the mortgage is a priority... we've come to think of it more as renting this house as apposed to buying it!!!

We are just hanging on by our teeth hoping that our circumstances will change!

feisty1

By changing to interest only you will save approx £100.00 HOWEVER if you redeemed this mortgage and added ERC's Early Repayment Charges to mortgage if property hasn't devalued............ you may just get away with a 75% LTV on a much lesser rate........ not necessarily with yr existing provider. Don't make a hasty decision, speaking to an independent mortgage advisor is probably yr best bet.