Libor Rate

Helpmaboab_2

Hi folks,

Long time reader, first time poster haha.

My wife and I are about to end our two year mortgage fixed rate at 6.94% and enter into whats known as a variable rate tracker which is 2.25 above the LIBOR rate.

Basically it means we are going to be paying less every month for our mortgage.

Now we got this mortgage at the time because it was the only one we could really get due to our circumstances. The name of the mortgage product is a Non Conforming ALmost Prime Status.

Could anyone help us out with this? Is it a good deal as it stands right now? Should we seek a new deal? Can someone explain it to us>

Cheers.

unite79

I assume you had a little bit of adverse credit - What LTV are you.

Helpmaboab_2

unite79 wrote: »

I assume you had a little bit of adverse credit - What LTV are you.

Ahem, yes we did. We havent missed a mortgage payment since.

The mortgage is an interest only mortgage and we paid a 5% deposit when we got the mortgage. I think the LTV is 95%, would that be right?

inspector_monkfish

have a look here, and read upwards from the last post....

http://forums.moneysavingexpert.com/showthread.html?t=1602429&page=11

inspector_monkfish

LIBORs are at all time lows right now, and are continuing a point or two lower everyday at the moment.

But how long this will last, nobody knows

Your deal should be based on 3 month LIBOR, which is curretly 1.10
So you will be paying 3.35.

To get back to your previous 6.94 level, 3mth LIBOR would have to get to 4.69. So you have a pretty big cushion !

BudgetDude

Helpmaboab, we've been on a repayment mortgage for 2 years and originally bought at 92% LTV, we've been told by A&L that we're now at 110% LTV due to the housing crash.

If you've been on interest only for 2 years then the chances are that you're in a similiar LTV situation to us, if not worse. If that's the case then you'll have to stay with your current lender.

_Andy_

Helpmaboab wrote: »

Could anyone help us out with this? Is it a good deal as it stands right now? Should we seek a new deal? Can someone explain it to us>

Cheers.

Based on it being a 95% interest only mortgage, you're either in zero or negative equity right now.
This rules out changing lenders.
If you contact your existing lender they will let you know if you have any other options at the moment.

inspector_monkfish

new 3mth LIBOR now 1.08, (down another 2points) just released...

Helpmaboab_2

inspector_monkfish wrote: »

LIBORs are at all time lows right now, and are continuing a point or two lower everyday at the moment.

But how long this will last, nobody knows

Your deal should be based on 3 month LIBOR, which is curretly 1.10
So you will be paying 3.35.

To get back to your previous 6.94 level, 3mth LIBOR would have to get to 4.69. So you have a pretty big cushion !

So it looks like it will take a while to get back to my current level and that I will not be able to change provider due to my high LTV? (Sorry ma new to this)

I think what I will do is transfer the extra cash flow from our mortgage payments into a savings account or something, so that we can try to save a deposit. Do you think that would be a good ide?

michaels

Sounds like a very good rate full stop let alone with your history and ltv

Helpmaboab_2

michaels wrote: »

Sounds like a very good rate full stop let alone with your history and ltv

Yeah,

We were fully expecting our monthly payment to increase. But its almost halved by todays rates. Seems to good to be true, hence why we came on here.