leaving my fixed rate deal early with woolwich

credit_crunch

hi all

i have lots of queries so any help is appreciated!

i bought my house in northern ireland in april 2008 for £130,000. i purchased the property through northern ireland co-ownership - so i only pay a mortgage for 50% of the property (£432 per month repayment mortgage) and £135 rent to co-ownership per month.

my fixed deal with woolwich is due to end april 2010. i have been looking at my mortgage statement and i have noticed an early repayment charge of £1941.90 and a final repayment charge of £275. do i pay bothe of these if i switch to a better deal with woolwich or even change lender?

i have no idea what the LTV is as we didn't put down a deposit at all. i plan on ringing the woolwich but wanted to do a little homework first - so i at least sound like i know what i am talking about lol!!

my current interest rate is 6.990% and the outstanding balance is £64,730.17.

thanks in advance guys - and if you need any further info let me know x
(sorry for the long post!)

Trying_to_be_good

I don't know anything about what else might be available to you, but do know that whenever you end your mortgage you will be charged the £275 fee to close the account, and if you end the mortgage before your fixed rate deal comes to an end you will ALSO have to pay the Early Repayment Charge (ERC), which you state is nearly £2,000.

In addition, if you change to another Woolwich deal, there's also a £100 rate switch fee. Not sure how they justify this, but it's in the terms and conditions.

skint_chick

You only pay your early repayment charge if you leave your fixed rate before april 2010 and you would only pay your £275 fee if you leave the woolwich. If you stay with them and change product you only pay the setup fee for the new product you choose.

Leaving your fixed rate early is going to be tricky - with property prices falling you may well be in negative equity - you'll know this if you take the current value of your house divide in in 2 to find out how much your share is worth and see if this is more or less than your current mortgage balance.

If you are lucky enough to have at least 10% equity in your share then there are other lenders who will lend on the Co-ownership scheme - but you need to make sure you tell them you're Co-ownership when you first speak to them rather than telling them you owe (for example) £65,000 on a property value of £130,000.

Why do you want to leave the fixed rate early? If you want to buy more of your share you can ask the Woolwich about extra borrowing, if you're considering moving you can usually keep your mortgage deal depending on the new property price etc. If it's just because rates are low right now then you'll need to have 25-40% equity in your share to benefit from this - and with property prices coming down this is unlikely, especially as you won't have reduced your mortgage balance that much in less than a year.

credit_crunch

thanks for the replies

the only reason i was considering moving my mortgage was to benefit from the interest rate cut - but you have both provided so much info that i never even knew existed lol!

looks like i will have to stick it out with woolwich - i work in an estate agents so i know roughly the value of my property and do know that I am in negative equity - but i feel negative equity will be only be an issue for me if i need to move house in a falling market.

thanks again for the info & advice xo