100% mortgage fixed rate about to expire

spriggsy

It's definately a variable, but the current SVR is lower (5.34%) than my current fixed rate (6.14%) so I won't be losing out in the short term. When I took out the mortgage the SVR was about 7% or somewhere round abouts, so it has come down a lot.

I'd be happy to go on to the SVR at the current rate, but once the economy starts to pick up and interest rates start to rise (therefore mortgage goes up), thats what worries me slightly.

spriggsy

Smurggle wrote: »

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!

I never thought of over paying, that doesn't sound like a bad idea! Ill give that some thought, thanks!

JimmyTheWig

spriggsy wrote: »

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?

Yes and no. All customers will get the same opportunity to get a new deal. You are not stuck because you originally got a 100% mortgage.
But, you are stuck now because you now need a 100% (or higher) mortgage. These don't exist for any customers - you're not being singled out.

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

In which case I think you are lucky with what has happened to interest rates over the last few months.

You could hunt around (with a fees-free broker, maybe) for a new deal. With your high loan to value you will have a job to get a good deal. You will pay high arrangement fees for this new deal, if you find one.
Alternativley you can stick with the SVR. This is normally a really bad idea, but with rates so low at the moment it sounds like you will be fine.


What I would suggest, on a slight aside, is that if your rate is coming down when your fix ends then you should be able to make overpayments on the mortgage. In other words, keep paying the same amount each month. This will bring the term down from 30 years and will save you a great deal in interest.

[Cross-posted with various people saying similar things. Sorry!]

Cesary_2

We are in the same position as you ...sort of. When we took out our mortgage we had 90% mortgage and then another amount as an unsecured loan. So we actually ended up having 110.5% in total tied into the same interest rate and same term. We saw our financial advisor last week and basically there is sod all he can do for us. Even if we only needed 90% the interest rate on the 90% deals works out as more interest than the lower variable rate we are moving onto. He worked out what our payments should be from next month and it looks like we should be svaing £130 a month.....We intend to pay the lower payments for the next few months until we get married - then after the wedding we will put them back up to what we are paying now and overpay on the mortgage as we can afford to do this, Oh and if you are with Northern Rock - (which I am just assuming from the SVR you put!!!) then check your mortgage offer. Our financial advisor pointed out that ours states that we will be moved onto a rate LOWER than their SVR....even if it is 0.1% it is still 0.1% in my pocket not theirs!!!!! I consider myself as very lucky that we managed to get our deal when we did. At least we have our home as if we had waited much longer we wouldnt have been able to afford it. I am not too worried about the interest rates going back up just yet. My financial advisor said to go back to him when things start picking up as more products will come back on to the market.

spriggsy

Ours is a 95% LTV with a 5% unsecured loan I think (paperwork is at home) so we would struggle to get another deal from what I've read.

The SVR of 5.34% is what is shown on the Alliance and Leicester website, but if it is lower for existing customers as you mention then bonus!!!

We were considering saving up a deposit when we bought our house, but we fell in love with our house when we saw it, so we don't have any regrets about taking out a 100% mortgage. Just interesting to know what our options are come septemeber.

Fliss_M

spriggsy wrote: »

Ours is a 95% LTV with a 5% unsecured loan I think (paperwork is at home) so we would struggle to get another deal from what I've read.

The SVR of 5.34% is what is shown on the Alliance and Leicester website, but if it is lower for existing customers as you mention then bonus!!!

We were considering saving up a deposit when we bought our house, but we fell in love with our house when we saw it, so we don't have any regrets about taking out a 100% mortgage. Just interesting to know what our options are come septemeber.

Double check your paperwork as many A&L customers have found they are going onto a tracker at the end of their fixed term rather then SVR. We took out a 95% mortgage 3 years ago (so now neg. equ.) but we are going onto a 0.99 + BOE rate rather then SVR and you need to own 40% of your house these days to get that sort of rate.
Worth a look or call at least.

pompeygirl

Hi Sprigsy,
I am in the same boat as you. I took out 100% mortgage in July 2007 with the Alliance and Leicester. It was 95% mortgage and 5% unsecured loan. My rate ends in April 2009.

A&L have just wrote to use to remind us that our rate is ending shortly and that if we want another fixed rate with them we firstly need to pay off all the unsecured loan upfront (so £5000) and get our house down to 90% LTV - thanks!!!!

Fortunately we revert to a tracker mortgage which is 1.99% above the BoE base rate and not their SVR so any money we save we can overpay on the unsecured loan to get this down as much as we can.

I too am very worried about when the interest rates start to rise again as this means payments going up. Im just hopeing that when the interest rates rise there maybe more products available for people who took out 100% mortgages.

My mortgage advisor said come back in 2 years when we first took out the mortgage and we will get you another fixed rate, he was not to know of course that the 100% mortagages would be taken from the market but I do feel like Im being penalised for having 100% mortgage and the unsecured loan even though I have a great credit rating and have never missed a payment.

Let me know what you find out.

andrewmp

You're extremely lucky the BOE let the govt dictate interest rates. If rates had risen, or stayed the same, you'd be up !!!!!! creek now. Did you not think about a longer fixed rate at the time?