Remortgaging with less than 90%

Bossk128

Hi there. I've still got 3 years left of my fixed term mortgage with Scottish Widows. I haven't done the maths but I know we won't have paid off 25% of the value of the house by then, and potentially won't have paid off 10%.

I'm guessing we're subprime! :rolleyes:

Anyway, if we don't start supporting savings (not allowed to overpay) and thus have less than 10% value paid off, where would we stand for remortgaging? Would we be 'kicked off' our current product, forced to remortgage (potentially difficult)? Or would we revert to their current variable rate product and thus be penalised by any difficulties getting better deals via remortgaging (due to low deposit, assuming the house sells)?

Thanks, and apologies if this has been answered before!

betmunch

You would go onto the lenders Standard Variable Rate after the fixed period ends. You wont be kicked off.

My question for you though, is why do you think you are subprime?

Cheers

Bossk128

Thanks for your reply. So regarding your answer, if the fixed rate finished now, we'd actually be better off as the interest rates have dropped over 2 years?

We took a 100% stepped mortgage over 30 years with the idea property is an investment. Thanks goodness we chose it as a home first and foremost!

Affording the repayments isn't an issue, phew.

Edit: And as an aside, negotiating a remortage with the current provider- the LTV rules still count, i.e. they may not let you take a different product unless you have savings to add to the current mortgage?

beecher

Bossk128 wrote: »

Edit: And as an aside, negotiating a remortage with the current provider- the LTV rules still count, i.e. they may not let you take a different product unless you have savings to add to the current mortgage?

Yes, that's the case though some lenders are being fairly generous at the moment, ie Halifax offer people deals even with an LTV of 120%

Things are likely to be very different in 3 years time, and I'd hazard a guess that SVRs will be a lot higher than they are at the moment. Who knows what deals banks will be offering by then. All you can do really is save as much as you possibly can over the next 3 years and see where we are then. As you have a 30 year term you're probably not going to have paid much off the mortgage through payments by then - there are calculators which will let you work this out.

Bossk128

Thanks for your informative replies, beecher.