Help Needed! C&G SVR

JamesP

Hi, my current 5 year deal at 5.49 with C&G has now finished and we are on the SVR of 2.5%. Obviously, our monthly payments have dropped considerably! I am looking to buy my dads house and to do this need to borrow an additional 30k which C&G have confirmed that they are happy to lend me. I had initally planned on keeping the £110k on the SVR and sticking the £30k on a 2 year fixed at 6.29% (We have an 80% LTV). However, the mortgage advisor has strongly advised against this, saying that it is risky as the SVR could go up. Another option is to move the entire £140k to a 5 year fixed with other lenders at 5%. My thinking is that the SVR can only be a maximum of 2% above the base rate and as we would only be tied in for 2 years the base rate would have to go up by 2.5% in the next 2 years for us to lose out? Any advice would be greatly appreciated.

JonnyBravo

If you're asking if I think rates will go up more than 2.5% in 2 years the answer is no.
If you're asking if I think you'll be able to cope with the payments if they do go up, say 4%, I have no idea.

(Incidentally if youre asking if I thought 2 years ago that rates would be down to 0.5% nowadays the answer is also no.... clearly I have no special powers!)

The answer to the first two questions are essentially what you need to weigh up.... ie your attitude to the risk a rate rise poses to you.


Me? After assuming lots of things I'd stick on SVR.

dimbo61

Hi JamesP,
Why did you take out the 5 year fix at 5.49% with C&G in the first place ?
Was it for security !
How much have you paid off your home/mortgage ?
So now you are taking an extra £30k in debt and you are happy to take a risk on the SVR !!!!
The BOE base rate dropped in a matter of 4/5 months from 5.5% to 0.5% WHO is to say it will not go back up as quickly
What would happen if the SVR on your mortgage was 7/8% could you afford it.
If you have had a large salary increase or can easily afford a big jump in mortgage costs then stay on the SVR.
I like to think long term ( a mortgage is usually for 20/25/30 years NOT 2!)
A 5 year fix gives you security and if you went for an offset mortgage you could either overpay or save into the offset account. GOOD LUCK your choice.