Value of my flat / new mortgage at the end of fixed term

alant1000

Hi All,

I took out a mortgage in Sept 2007 (just before the bubble burst) for £156,000 against a brand new flat for £178,000. So i put in £22k for as the deposit.

I'm on interest only; my current rate is 5.53%, £723.40 per month, this comes to an end in Sept this year.

My mortgage makes provisions for an overpayment of £500 per month max. I've spent the last 9-12 months getting shot of a car loan, I overpaid to the tune of about 10k and now own my year old car outright. I now have no loan or credit cards.

However, i haven't (yet) been paying into the mortgage - so I will be paying in the £500 a month until Sept when it comes to the end of the fixed rate. By this time, i would have only reduced the loan sum to about £152k.

My flat is currently worth about £150k

So i was wondering
A) If i stick to the existing deal and let it tick over, is Nationwide likely to work with me to renegotiate the rate to keep me on?
If I want to get a better % and new term elsewhere, I take it I'm going to need a massive load of £££ as they wont care about the fact my flat has lost a load of money since i took the original mortgage?

I just wondered what was the experience of others who are remortgaging now, as their properties have devalued?

thanks
alant100000000

beecher

If you stick with the existing deal, you'll be put onto Nationwide's SVR as you'll almost definitely be in negative equity. The rate is presently 4% so you'll be paying less. Problem is that you won't be able to remortgage until your LTV is a lot lower - probably 90% at most. I think while on the SVR you can overpay by as much as you want but someone else will tell you if this is correct or not.

edit: SVR is 3.5% - it is hard to keep up!!