Rate reduction on a fixed rate mortgage?!

Ian_Griffiths_Halifax

Gorgeous_George wrote: »

That'll help. Not.

GG

Yes it will if the OP needs to reduce outgoings and doesn't have £75 to pay for the change up front!

Gorgeous_George

Ok, owing more on a mortgage that is already difficult to repay, so the OP can overpay the IO mortgage makes a lot of sense. Thanks for clearing that up.

GG

Ian_Griffiths_Halifax

Gorgeous_George wrote: »

Ok, owing more on a mortgage that is already difficult to repay, so the OP can overpay the IO mortgage makes a lot of sense. Thanks for clearing that up.

GG

But it wouldn't be as difficult to pay if it were on Interest Only and the first Overpayment would/may pay the £75 off.

Gorgeous_George

What the OP really needs is a 125% Together mortgage from Northern Rock. Then she can use the excess to pay her mortgage and have a well-deserved holiday in the sun.

GG

Ian_Griffiths_Halifax

Now that would be silly, but hell why not!

dmg24

Mrs.T.B wrote: »

We are currently paying 6.34%.

A friend made the suggestion that we contact our mortgage provider to say that we feel that in the future we may have problems meeting the payments and so we are asking for help before this becomes an issue. We just wanted other peoples opinions on the matter before we decided if it was a wise idea or not!

If we pay it off now we will pay 4.000% of £195000.

We opted for a fixed rate so we new what the monthly payments would be, and we can meet them but its tight.

The mortgage is over 35 years.

If rates are higher in April 2010 we would probably have to go interest only until our finances improve. Unfortunately we will struggle to remortgage i think as i will no longer be working and we are currently in a negative equity situation with the drop in house prices.

I suppose its just being cheeky to see if we can benefit from the rate cuts.

Your comments are appreciated.

Hi Mrs. T.B,

Is there a reason why you will no longer be working in 2010, and is there a way around this, so as to maintain your current level of income?

My feeling about going interest only is that I would avoid it if at all possible. Even if you are intending to put away the capital element each month, it is all too tempting not to do so, or to dip into the money for other reasons, particularly if times get tough.

If you are struggling with meeting your outgoings, the Debtfree Wanabee board would be a good place to start in maximising your income and minimising your outgoings. It may be that you can make cutbacks in other areas, so that you can still manage your repayments.

Good luck x

Mrs.T.B

My husband works 7 days a week whenever possible but as we have a 1yr old and another baby due in June, I will give up work ithen as childcare for 2 children costs more than I can earn.

We have looked at reducing our outgoings but as all we pay are the usual utility bills and we have to pay those there isnt anything we can do there, we dont have sky or anything like that.

I think we may well look into the interest only option, not something we wanted to do as we would of course rather pay the balance off too, but it might be that needs must if not right now then when our current mortgage ends.

A holiday in the sun would be lovely but even if NR still offered 125% Together Mortgages, we had one, i dont think they would lend to us in the present climate, i think we will be stuck with Halifax and probably their standard variable rate when our mortgage ends!!

MORPH3US

All I can say is WOW, £200k on 35 year mortgage at 6.34% :eek:

You must have big incomes to pay for that....

And a kid with a second on the way :eek:

All of that scares me and its not even my problem....

BTW I think (know) they were joking about the 125% mortgage option....

Gorgeous_George

In 2010 you will go onto Halifax's SVR (curently 4.75%). It is likely that the SVR will be similar even in 2010.

Stick with a repayment mortgage and your payments could fall from the current £1,157 to £960 per month.

If possible, save now. Anything at all. It will help bridge the gap between when you stop earning and when the fixed rate ends. It's going to be tight but you must have known that when you took out your mortgage.

What was your plan if interest rates had risen to 7% or 8%? I guess the baby wasn't part of your plan. This is the problem when lenders use both salaries to assess affordability.

In these extraordinary times, I'd like to see lenders reduce fixed rates for current borrowers but I can't see it happening. It doesn't work like that.

Best wishes

GG

Gorgeous_George

MORPH3US wrote: »

...BTW I think (know) they were joking about the 125% mortgage option....

I know that I was joking. Not so sure about Ian.

GG