Re-negotiating a mortgage

little-miss-little

Hi all,

My knowledge isn't 100% up on mortgages, so if it's daft or doesn't make sense, please bear with me.

We took out our first mortgage last year with Halifax at a repayment fixed rate of 6.59% for 5 years. At the time it was the best deal available and we could easily afford it. Unfortunately, due to the current climate, i've had my salary cut which we just didn't foresee as i've only just graduated so we've only ever expected my salary to increase.

I'm sure that i read one of Martins emails a few months ago that mentioned how someone had managed to re-negotiate their repayment rate percentage on a fixed mortgage with their bank.

I'm just wondering, have there been any more stories or examples of people attempting to do this and have they managed to get anywhere by talking to their bank? If something like this was to be successful, are there any penalty charges even though they haven't switched mortgage lenders?

I've tried to have a look through the MSE website but haven't got very far finding out any more information on this so anyones knowledge would be greatly appreciated. I'm just so tempted to go and plead with my bank just for a reduction of 0.5% or something!!!

Thanks in advance.
Alex:money:

_Andy_

They won't agree any rate cut, unless you want to come out of the rate completely and incur early repayment charges which will be high.

Spangled

Remortgaging is not out of the question and could make financial sense esp as you're only one year into your five-year fix. (If you were close to the end of your fix, it would unlikely be worth it.)

It could be quite possible to remortgage to, say, a new five-year fix around 5% with a different lender. You'd need to work out whether the monthly saving would offset any early repayment charges you have to pay on your current mortgage and any application fees for the new mortgage.

Your ability to remortgage would also be heavily dependent on a) your loan-to-value (LTV) b) the size of your mortgage c) your current earnings etc.

If you post details of your mortgage size, LTV, early repayment charges and current earnings then I'm sure posters here can help you work out what may be possible.

Radiantsoul

Probably not.

What is in it for the lender? If interest rates had gone upwards would you offer to pay them a bit more?

If you remortgage you will need to pay exit fees on your old mortgage and rearrangements on your new mortgage. And if you have had your salary cut where will you get these funds from...

Can you make payments at the level your are being charged? If not then that is a different issue. If you can then you are probably going to have to grin and bear it. Unless you have a lot of equity your rate is not really that bad, and who knows where interest rates are going next.