SVR vs Fixed Rate

angle

Hi, My husband and I bought our house nearly 2 years ago with a mortgage that has a 2 year fixed interest rate. When this is up it switches to a svr which is currently at 3.5%. Alternatively we've been offered to switch to a 3-year fixed rate of 5.29%.
Obviously 3.5% is rather attractive but who knows how long this will last. If we switch to the 5.29% we have to pay a fee of £999, which can be added to the mortgage. This, persumably, is a limited time offer, but it is lower than we currently pay and I like the security of knowing exactly what we will be paying every month for the next 3 years.

We are both undecided which is the best option. Anyone got any advice?

Thanks.

beecher

Are you with Halifax? If so I take it your LTV is above 90% from looking at this

http://www.halifax.co.uk/mortgages/existing-customer-fixed-95ltv.asp#3_year_fixed

The stepped option might be an option for you as well?

You could ask Halifax if you could book the deal you want but ask to have it start in a few months time - can't remember how long they allowed me to stay on the SVR when I booked mine but it was certainly 2 months. You could also ask them for the option to move to another deal if you decide to do so in the time remaining, as they allowed me to do this too.

As for whether you should stay on the SVR only you can decide if you're willing to take the gamble.

angle

Thank you. I'll have a look at that tomorrow when my brain is a little less fried!

What's LTV mean?

_Andy_

LTV = loan to value

How much you owe versus how much the home is worth, as a percentage.
E.g. if you owed £90,000 and the home was worth £100,000, your LTV would be 90%.

Blackdeal

LTV = Loan to Value - so 90% LTV would mean you have £90,000 mortgage on a £100,000 property.

angle

Thanks. I just couldn't think think what it might stand for.

It wasn't 90% when we bought it, but it is now