Halifax

elbutre

hi

i have a fixed 2 yr mortage with halifax (bought house in march 2007 for 361k with 85% mortgage) which has now come to an end

when i recently rang halifax they valued the house at 315k and with 288k mortgage still outstanding the best rate they could give me was 4.89% (95% lvr) with £1249 fee. I am not sure if i agree with the valuation but perhaps i am not accepting that also my house has fallen in price :rolleyes:

i thought i wait and see wha the BoE rate does, which came down from 1 to 0.5% but i checked the Halifax website and they have now removed their 95% lvr mortgages from the 3yr fixed rate and created a new category of 4yr and where they offer 95% lvr mortgage for 4.99%

so rate has gone up but also the term

i am not sure what to do, i do not like having a variable rate (which is what i am on now at 3.5% and with house prices continue to keep coming down my LVR is only getting worse and worse and the interest rates will go up again at some point i think, and i like the certainty of fixed rates (have always opted for fixed rates) but 4.99% does not seems that good a rate with the current BoE rate at 0.5%

or should i just grap this 4.99% 4 yr fixed rate with a one of charge of £1249 and be done with worrying about it?

cheers

Ms_Brush

In the short term I would stick with the variable rate and overpay like mad, so that you are eating into the debt, then keep the situation under review for a few months until its looking a bit more sensible out there!

The world has gone a bit mad - to me, given the choice of no fee and 3.5% or paying £1249 and 1.5% more than I need to each month seems like a no-brainer to me... unless of course I have missed something??

beecher

The 5 year fix is also 4.99% for the same fee.

I'm not sure what you should do - you're pretty close to the 95% LTV and I'd be concerned you may not get another deal with Halifax if you leave it too long. There's no way you can overpay by enough to keep up with the price falls, and your LTV is already too high to get a deal elsewhere. However 3.5% is quite a bit lower, so you need to weigh up the gamble really. Good luck making the decision

elbutre

Ms_Brush wrote: »

The world has gone a bit mad - to me, given the choice of no fee and 3.5% or paying £1249 and 1.5% more than I need to each month seems like a no-brainer to me... unless of course I have missed something??

the savings are about £200 per month, but as beecher pointed out i might run the risk of not being able to remortage to a fixed deal at all in 6 months time if house prices continue to fall at 10% per year and i will be stuck with the SVR which i admit currently is a very cheap 3.5% but if this goes up by 2% it is going to hurt every month.

there are very few people who predicted the BoE rate would be 0.5% today while 6 months ago it was closer to 5% if it goes back up to 5% again and the SVR follows the same steep increase i will be paying 8.5% and any fixed deal will be much higher than the current 4.99%

i guess i have already saved nearly £400 the last 2 months so the fee of £1249 will in fact only cost me £849.

i think i am going to go for certainty in these uncertain times and fix it for 5 years. perhaps this year it will cost me more than i would want to but i doubt the fixed rates with my kind of LTV will become any cheaper in the near future.

clairehi

You have a large mortgage (£288K) and so increases in interest rates are going to cost you a lot more £ than many people.

wait and see is not an option as you are aware the LTV is only going to get worse in the next few months.

I think you are right to go for a 5 yr fix especially if you are on the SVR as you can bet this will go up faster than bank base rate.

the question is whether the certainty of gaining £200 a month now is worth more to you than the possibility of losing a fair bit more than that a month at a future date.

I dont think £200 a month is worth it myself. Dont fix for less than 5 years though as you will not benefit from the longer term gain but will definitely suffer the short term loss!

y3andy

I recently had the same worries about being stuck on the SVR so I rang them and the guy told me this. We could move to the 95% deal even if the house value came down so the LTV was 120% (mortgage higher than house value). Now this is contrary to what the website says but the guy at Halifax was adament. Would be interested if anybody else has been told the same thing.

AngelaUK

Yes I have, last month they made my current LTV 111% (90% when I took it out) and were still willing to put me on the 95% existing customer rate, even though have decided to stay on the SVR for now as hoping to move.

bigw81

Halifax will allow you to take a 'retention' deal (ie the rates they offer existing clients up to 95%) even if your loan is anything up to 120% ltv. So you don't need to worry TOO much about whether you're going to be able to get a deal from Halifax - what you do need to decide is whether any deal you'll be offered in the future will be a) a long-term fixed rate and b) an attractive rate. House prices look like they're going to slide further in the short term, and lenders usually review their valuations at the start of each quarter, so at 1st April the value of your home in the lender's eyes will probably go down slightly again. There seem to be loads of people sitting on SVR 'waiting for something to happen' - with BoE rate so very low now, there is one obvious thing that could happen - it could start to go back up.....
If I were you I'd go for it and fix - yes, you might feel you're paying a little over the odds for a while, but fixed rates are all about the longer term...
Bear in mind that you're not comparing the fixed rate with BoE base rate - that BoE rate is irrelevant as its not available to you - you need to compare it with what you're paying by NOT taking a product, which is currently 3.5%. The arrangement fee can often be added to the loan so you don't need to find that cash up front. Think it over - but take your time as you have until your loan gets to 120% ltv to make a decision.