100% mortgage fixed rate about to expire

spriggsy

Hi,

Not sure if this has already been asked, but our fixed rate mortgage is due to expire in September, and we are hoping to get another fixed rate. However, out original mortgage was 100%, and since they have abolished 100% mortgages, how will I be affected??

Thanks for your help

beecher

You'll be unable to get another fixed rate, or remortgage elsewhere. You need an LTV of 90% or less, and you're likely to be in negative equity. You'll be on the SVR of your lender which may be lower than your present deal, though no-one knows for sure.

spriggsy

Well our current fixed rate is higher that the current SVR so our payments will come down.

So what your saying is that I'm 'stuck' because I took out a 100% mortgage before they abolished them? Surely the banks can offer those customers the same opportunity to get a new deal? It sounds like Im going to get penalised because I took a product they don't offer anymore?

Is anyone else in this position?

Reds-on-Sea

You took out a 100% mortgage - how long was it for? I assume you have paid off some capital in that time?

What is your LTV now? Or maybe the value of your house has dropped and you're still at 100%?

You'll have to go on the SVR I expect

spriggsy

It will 2 years out of a 30 year mortgage once the fixed rate runs out, so I guess about 6%. (correct me if Im wrong)

We bought the house for about £8,000 less than it was valued at the time (which was £125,000), but it's obvious that it has come down since then.

beecher

Who is your lender? People have posted reports of the Halifax giving people new deals even though they're in negative equity so you could contact your lender nearer the time to see if there is any chance of a new deal. With a 30 year mortgage you're unlikely to have paid off very much of your mortgage at all in 2 years - maybe about £3,000. Nowhere near 6% of it I'm afraid.

spriggsy

OK, thanks. It came to me after I posted that I probably haven't paid off 6% because of interest.

My lender is Alliance & Leicester. We haven't missed or been late with a payment, so I thought that might help our situation come September.

Conrad

Look at it from another perspective, far from being penalised you were 'lucky' to be one of the last to have been able to obtain a 100% mortgage before they died out. You thereby did not have to come up with a deposit of hard earned cash.

spriggsy

I do count myself lucky Conrad in that respect, there's no doubting that.

However, from my perspective, after being told 'yes, you can have this fixed rate mortgage for two years, after which we can offer you a new deal', to 'we dont do 100% mortgages any more, we cant offer you a new deal', I do consider this being penalised.

Of course, we weren't to know they were going to abolish the 100% mortgage, no one was, but surely the banks would have some deals they can offer to the pocket of customers that took out a 100% mortgage to give them the same opportunity as everyone else?

beecher

spriggsy wrote: »

I do count myself lucky Conrad in that respect, there's no doubting that.

However, from my perspective, after being told 'yes, you can have this fixed rate mortgage for two years, after which we can offer you a new deal', to 'we dont do 100% mortgages any more, we cant offer you a new deal', I do consider this being penalised.

Of course, we weren't to know they were going to abolish the 100% mortgage, no one was, but surely the banks would have some deals they can offer to the pocket of customers that took out a 100% mortgage to give them the same opportunity as everyone else?

But you're a far worse risk to the bank than someone with equity, so why would the bank give you the same deal they give to someone with a low LTV? Your mortgage offer won't have guaranteed that you'd get a new deal, it would've stated that you'd go onto the SVR afterwards.

Actually, there is one thing to check and that is whether it is the SVR you go onto - you might be lucky and go onto a tracker. Have a look at your documents and see.

Smurggle

You may be much better off going onto the SVR, I was one of those who were offered a Halifax deal recently despite being in negative equity, very nice of them you think but in actual fact they were charging £1499 arrangement fee for a 2 year fix which is just not worht doing at the moment, you may be much better off (as we were) going onto their SVR and overpaying as much as possible off your mortgage- make hay while the sun shines and all that!