secured loans included in LTV?

schmickleicklepickle

Hi there,

I am curious as to whether a secured loan is taken into account when a mortgage company calculates LTV? Ignoring our secured loan we will be just under 75% when our current fixed deal comes to an end . But if it is taken into account by the lender then total LTV will be around 95% (being conservative on house estimate).

With our current lender there is a big difference in the new fixed rates being offered
for 75% LTV and for 95% LTV, assuming the latter would be available tho advertised on website! We would either get a great rate compared to the 6.09% we are on now and could continue over-paying double what we currently are or we would have to go on SVR (great short term but risky longer term for getting us to <75% LTV)

Many thanks in advance for anybody's thoughts.

dimbo61

I think the word secured ( on your home ) is the key.
You need to speak to your existing lender first
Can you overpay the loan secured on your home as its likely to be at the higher rate than the mortgage.
If you do go onto the lenders SVR then overpay as much as you can afford each month. GOOD LUCK

schmickleicklepickle

Thanks Dimbo - We will get penalties if we overpay the secure loan.
Yes, if we do go onto the SVR we will over pay big time but think I would prefer a good fixd rate!

dimbo61

As someone with a long term (5 years) fixed rate deal I have to agree with you about taking a fixed rate deal.
So back to your existing lender and see what they can offer !
Consider how long the secured loan lasts ? and see if you can get a good 5/7/10 year deal so you can build the equity up in your home and get a better deal next time 60/75% LTV !!
Overpay if you can its your home not just an investment and the sooner the debt is repayed the sooner you are mortgage free and you will also save thousands £ on interest payments. GOOD LUCK