Remortgage on a fixed deal or stick with SVR?

Lu_Lu

I hope someone can offer some sound advice.

We have 2 months left on a 2yr fixed deal at 5.89% with Abbey (really wish I'd have fixed for longer)

The outstanding balance on the mortgage is just over £155K and valuation 2yrs ago was £180K (but obv worried this will be less now).

A broker has searched the market for us and found a 5yr fixed deal with Alliance and Leicester at 5.99% with a £995 fee and monthly payments of nearly £30 a month more than we pay now.

I called Abbey and they can also offer 5.99% with a £125 fee and presumably no valuation or credit checks or anything, we'd just move over? This is an extra £11 a month so not a disaster.

Bue we're not sure whether to stick with the SVR for now. I worry that interest rates will go up and then fixed rates will be impossible to find. But we could keep paying the same amount per month that we have been whilst on the SVR to pay off more??

Really don't know. What are the general views on interest rates?

Any advice would be welcome, thanks.

_Andy_

Hi

If you do a search of this forum (try something like 'fixed or SVR') this has been discussed many times in other threads, you should be able to find some useful discussion.

Lu_Lu

_Andy_ wrote: »

Hi

If you do a search of this forum (try something like 'fixed or SVR') this has been discussed many times in other threads, you should be able to find some useful discussion.

I have already done this and looked through loads of threads and found nothing that relates to us.

nrsql

5.99% is quite high but it's for 5 years so might not be bad.
£125 fees is quite low too - the £995 would put me off the other one.

Check when you have to take up the deal.
I've just paid £99 booking fee for a 3 year fixed rate and have 6 months to take it up. I'll take as much of that time as possible as I'm on 1.39% at the moment.

murphytheblacklabrador

its anybodies guess as to how things will go.....if the big boys could not see the whole recession coming what hope do we have.

the best thing i could say is if its your family home, you have jobs that are secure....then fixed rate is the safest, atleast you know your payments.

SVR.....well if its low then you will be saving money on your current payments, so extra money in the pocket.....never a bad thing.....but the gamble here is that things do not get worse....

personally i think things in the mortgage market will get better in about 8 months and we should start to see better deals in early 2010....

...thats my guess....

...but i dont head up the Royal Bank of Scotland or anything......but i do believe the CEO's job is in the local job centre now...so might apply....cant do any worse...

Lynn11

We were on our lender's varible and managed to secure a 3yr fixed deal a few weeks ago - Im glad that this is secure as we are on the varible this month and got onto our deal in August and our payments only increase by £10 per month which is great, as this is greatly reduced from our previous fixed deal which ended 31st May. Think about it if you have a reasonable deal with your current lender, then they will process your deal without any valuations and waiting for being accepted or declined. You could ask if you could secure the deal with your current lender and start this in Sept if they will allow this - therefore you will be paying the varible for the next 2mths, I am glad that we secured our deal as upon looking at the nationwide deals the rate has gone up in the last 2 weeks.

Thrugelmir

Do you have any other outstanding debt credit card or loans? If yes, consider paying that off first by dropping onto the SVR for a period.

Watch the Fixed Rates closely as changes may be sudden when they occur.

cardiffcityfc1

Hi, i am also with Abbey at the moment with my fixed rate of 5.89% due to end in September at which point i am due to automatically due to switch to their SVR as per original deal. When i called them up to check their SVR they told me it was 4.2% (it was 7.9% when i took out the mortgage 2 years ago!).

A 1.5% decrease on your mortgage would be quite a bit and you could always stick with the SVR and if it increases find a fixed rate deal then.

nrsql

cardiffcityfc1 wrote: »

Hi, i am also with Abbey at the moment with my fixed rate of 5.89% due to end in September at which point i am due to automatically due to switch to their SVR as per original deal. When i called them up to check their SVR they told me it was 4.2% (it was 7.9% when i took out the mortgage 2 years ago!).

A 1.5% decrease on your mortgage would be quite a bit and you could always stick with the SVR and if it increases find a fixed rate deal then.

If you wait for the SVR to increase you will probably find the fixed rates have also increased.

trynsave

Personally with your LTV I'd be very tempted by the fxd deal esp if they don't do a valuation. You may even be looking at needing a 100% deal if they looked too close.

In my opinion house prices will continue to fall which will make your predicament worse. You say that you wished you had fixed for longer 2 yrs ago so why the dilemma now?

For those with low mortgages and low LTV's they can risk the fate of a raising SVR. Can you? Are you prepared to risk your home if the rates go up and you can't fix when you want to? There are lots of people on excellent tracker deals just sitting and watching the market ready to pounce when the going starts getting tough. Are you sure you could compete with the best of them when they are all clamouring for a fxd rate?

If you are then wait it out - personally I wouldn't risk it.

Lu_Lu

Thanks all - I think the majority vote would be to fix again and that's what we're going to do.

It's not worht the risk of valuations etc and going down that road again for the sake of a £125 fee.

I think the fixed rates will rise soon also and I don't want to be in that position when they do.

Off to call Abbey now....