Negative equity and options..

cheekyboy_123

Hello all

My Mortgage with Halifax is due to come to an end at the end of June. It was fixed for 2 years at 4.99%.
Bought the property (flat) for £220,000 now worth around the £200k mark..
Their house price index valued the property - £165,000 :huh:
This is definatley way out as i know a flat in the same block in moderate condition sold for 190k only two weeks ago..Mine has had the benefit of a full refurb..
Remaining mortgage amount £191,000..

So the LTV rate isn't great! Contacted Halifax who have said i could either -

A - switch to a 5 year tracker (tracks at 2.79% above base rate)...So currently on 3.29% + 1200 fee

B - Switch to a 4 year fixed rate at 5.19% + 1200 fee (i have this held but have been told this is no available to other customers and closest 5 year deal is at 5.79%)

C - hang tight on a variable rate currently at 3.5%

C looks very tempting but i am worried that i could miss the 5.19% fixed deal when the interest rates start to climb again..From what i have read in other threads etc, it seems fixing for a long period would be prudent (or not)..Due to my circumstances (LTV), i don't believe moving to another provider is an option either.

I know there isn't a right or wrong answer, but wanted to get some views on what others would do..

Thanks in advance..

Pee

You are right. Noone knows what interest rates are going to do.

I think we can be fairly confident that they won't be going down any further.

I personally am inclined to think this recessions is deeper than some other people seem to think and there are more and more people losing jobs out there, which will reduce the inflationary pressures and mean rates could stay low for a bit.

Can you overpay your mortgage a bit to improve the LTV, if not for this remortgage then for in the future?

dimbo61

The 5.19% four year fix is only a little higher than you have been paying for the last 2 years!
You have security and we all hope the housing market will improve.
Overpay if you can and reduce your debt NOT improve the property.

Thrugelmir

Their house price index valued the property - £165,000 :huh:

Get a proper valuation. Not sure how you expect an index to view your property.