End of Fixed Rate Mortgage

pennygoodall

Hi I have a Birmingham Midshires fixed interest only mortgage, the rate is 5.95% untill 1/4/2009

My paperwork says the mortgage will be charged at

a variable rate which is 1.99% above Bank of England base rate, Currently 5.25% (this is in March 2007) for the remaining term of the loan, to give a current rate payable of 7.24% (this is in March 2007)

Sorry i am new to this type of forum, and not to sure my luck might have changed......because if i read that right in April, my mortgage with out doing anything, changes to 3.99% at the present time, Do you know if this is correct. Thanks for any help

Gorgeous_George

Sounds right to me. Effectively, you revert to a tracker at BofE Base Rate +1.99%.

A £100K mortgage taken out over 25 years should see your monthly repayments fall from £642.25 to £533.72.

Happy New Year.

:beer:

GG

dimbo61

So your mortgage should change from 5.95% to 3.99% but you are only paying interest only !
Can you afford to move to repayment or overpay your IO mortgage by the money you will now save because your mortgage has gone down.
Its been a very bad year for stocks and shares so how do you plan on paying off your mortgage ?

Dick_here

dimbo61 wrote: »

So your mortgage should change from 5.95% to 3.99% but you are only paying interest only !
Can you afford to move to repayment or overpay your IO mortgage by the money you will now save because your mortgage has gone down.
Its been a very bad year for stocks and shares so how do you plan on paying off your mortgage ?

Hear, hear ! People are happy to constantly criticize endowments these days due to the shortfall problems, yet the number of interest only mortgagees where there appears no thought whatsoever has been given to actually repaying the capital at all is truly frightening !

Squish_21

Yup thats correct, so you'll be paying less than before.

pennygoodall

dimbo61 wrote: »

So your mortgage should change from 5.95% to 3.99% but you are only paying interest only !
Can you afford to move to repayment or overpay your IO mortgage by the money you will now save because your mortgage has gone down.
Its been a very bad year for stocks and shares so how do you plan on paying off your mortgage ?

My Mortgage is for 14 years, so have 12 left, i have another property worth at present about £150000 to sell to cover the mortgage, if that does not cover it, i would sell my main property and down size. My main property is worth about £350000+ at present (and i only have a £143000 mortgage) , but if the market recovers in 12 years i hope to be still quids in, Thanks for your response

dimbo61

Could you rent out your other property and change to repayment.
In 12/14 years you would be much better off if you had 2 properties bought and paid for as rental income would help boost income.
You can put interest payments against profit from renting out other property.
Good luck and hope you can make the most of the current low mortgage rates.