Re-mortgage - End of Fix - What should I do!?

pamelakt

Hi everyone,

I took a mortgage out 2 yrs ago and the 2 yr fix ends end of March 08.

I had an interest only mortgage which I now need to switch to a repayment as obv the value of my flat has probably gone down since I bought it.

Having visited my mortgage adviser this weekend I was shocked to find Abbey would not offer me another fix rate unless I give them £900 upfront, and that I would have to go onto their variable rate. For someone who lives alone & doesn't earn a great deal, the uncertainty of a SVR mortgage is really daunting.

Am I righ tin thinking I will have to lump this? As if I switch to another lender they will also charge about £800 upfront product fee, and will want to value my flat which oculd have lost value over the past 2 years?

What do I do when the interest goes up? Magically find £800 from somewhere so I can fix a rate for 2 years!?

I'm really starting to wish I hadn't bothered.

Any advice would be welcome!!

Thx

_Andy_

Impossible to know what your options are without knowing how much you owe on the mortgage and (being realistic bearing in mind the market) how much your home is worth.

dimbo61

You have been in a fixed rate deal for the last 2 years ? and I am guessing that the fixed rate is higher than abbeys current SVR which you go onto in March.
So save the difference between your old mortgage payment and your new ( lower !!) mortgage payment in a high interest savings account for the next few months and see what deals are available to you at the end of this year.
If you have any spare money then overpay the IO mortgage as well.
Start saving money not spending it

pamelakt

I was on an interest only mortgage and will be switching to a repayment mortgage so my monthly payments are higher. Therefore I won't be able to save a difference.

I bought my flat for £75,000 and my mortgage was for £68, 089 or thereabouts as I paid a 10% deposit at the time.

_Andy_

The problem is going to be that the property value will probablly have dropped quite a bit, this may mean you would need to stick with your current lender.

pamelakt

That is what I'm thinking, I just don't like the idea of being on SVR....

Squish_21

SVR is a bit scary as rates are bound to rise at some point but for most people in neagative equity there is no other option than SVR at present.