Remortgage Advice (Scotland)

raedrenn

Any advice welcomed..

I'm unsure what to do with my mortgage after my 3-year fixed rate with Lloyds TSB ended in January. I have £91k outstanding and have reverted to their SVR which is a very nice 2.5% and saving us £100 a month.

Lloyds currently values the house at £118k - not that they've seen it for 3 years and we have made/are still making substantial improvements. (This is where the extra £100/month goes). My equity is therfore about 77% based on Lloyds valuation and I am debating fixing on one of the following rates available for a <80% LTV:

- Clydesdale Bank - 4.79% for five years
- Furness BS - 3.4% for 3 years

Or should I hang on to the SVR for a while longer whilst improving the house? Of course, another lender might value the house differently from Lloyds and house prices haven't dropped as much in Scotland...Arraghhh

astreix

What would happen if your repayments next month went up by £200-£300?

If you can easily absorb such a rise, I'd say enjoy your low rate now and fix it when it looks like rates are about to start rising. The thing to watch out for is that if house prices continue to fall your LTV will increase and you might need to put in some money to reduce LTV and get a good deal.

On the other hand if such an increase will mess up your monthly finances, then it is worth paying a premium to get certainty of fixed rate.