Fixed rate offset at 90% LTV?

ey_up

Hi,

Has anyone come across anything around these levels? I am struggling to find this on the online search engines. I require financing for a £126k house with a 10% deposit (ie £113k mortgage) and although I enter those details when I check the information the LTVs are much lower at between 60% and 75% and/or the rates are variable when I ideally want a fixed period of 3 - 5 years. Mortgage would work out at approx 2.6 times joint earnings. The logic of the offset is that there will be a pro-longed period when we renovate the house and the offset balance will be circa £25k. Any help would be appreciated.

Thanks
Neil

herbiesjp

You could possibly find flexible deals at 85% which would work in the same way.

However the rates are not that competitive and so you would really need to pay in a large amount of extra funds to get the benefits of that added flexibility

ey_up

Thanks for the reply herbie. I did think the high LTV may scuppa the thinking. I will have a look at the flexible mortgage deals and see what I can see.

Unfortunately we know the house requires £25 - 35k of renovation and that we are likely to "save" approx £500 pcm in addition to our current savings which will cover a significant amount of the work. Given that we fully anticipate the project to take 12 months from now including a delayed completion an offset sounded appealing. Added to this my girlfriend will also likely receive a substantial salary increase this time next year which will allow £1,000pcm to be saved giving us plenty of additional capacity to offset the mortgage or spend as see fit.

Its our first move towards getting a house and it just has to be so complicated doesnt it! ;-)

nicko33

ey_up wrote: »

The logic of the offset is that there will be a pro-longed period when we renovate the house and the offset balance will be circa £25k.

is this 25k available to you now?
becaue if so, why not use some of it as deposit

13k of it would make you up to 80% LTV, then while you are renovating you could use the flexibity of the mortgage to only pay off the interest.
what would have been your capital repayment could then go into your renovation fund

ey_up

Hi Nicko,

Yes that one other option I have been thinking about. We can pay a very healthy deposit and I have forecasts at 20%, 15% and 10% deposit which leave between £13k and £27k renovation funds. Unfortunately the 10% deposit makes the most sense when looking at the kind of house we would like to achieve once the work is complete.

Dilemas, dilemas, dilemas. I thank you for you input.

herbiesjp

The flexible deal may work well for you then

Reducing your mortgage payments if you want, or keeping the same mortgage payments and thereby overpaying even more on the mortgage.

Its our first move towards getting a house and it just has to be so complicated doesnt it! ;-)

You could always find a whole of market adviser to help and take away the stress of looking for the mortgage yourself.

ey_up

Thanks Herbie,

I did take get myself a mortgage adviser through the company I work. This gives me the bonus also that I will receive a slice of the commission also ;-) However I am from a financial background and I like to explore all options possible. Partly for my own understanding and partly to ensure I get the best I can. I think the bonus we have is the funds we have accumulated give us options, but the major draw back to the options is picking one when such a wide range of variations are available.

I think the adviser was a little shocked at the budgets I had prepared but as I say I am from a financial background so it is the game I am most used to. Stress? Whats that? ;-)

Onwards with the research.

Cheers