What to do? End of 3 year fixed rate

Chezis21

Hi,


I have a 3 years fixed rate mortgage with Leeds BS which ends on 31/10.
The mortgage will revert to SVR.

The fixed rate is : 4.49% and the new rate will be 5.49%.


My current monthly payment is £640 and it will rise to £679.55.


The outstanding mortgage balance as of 31/12/08 was £105,189


Loan term was 25 years – now 22years
I am considering overpaying and can afford to pay up to £1000 per mth.
Would it be best to stay on the SVR or look for another deal with terms which would allow me to make over payments or just stay on the SVR and make over payments?
Any advice would be appreciated.


Chez

Dave_Ham

What is the approx. value of your property ??

If you can afford to overpay, it is always good advice to do this. Most traditional lenders will allow up to 10% per year as an overpayment.

Dependant on your loan to value % (mortgage value divided by house price) and your personal circumstances, I would expect you to be able to get a more competetive rate than SVR offered.

Additionally you could potentially get free valuation and legals if you went to remortgage and save further money.

Good luck whatever you decide.

shorehambeach

Hello :-)

it depends on the value of your property to whether its worth going for a new deal....

On the surface of it the SVR rate that you will go onto sems a pretty good deal unless you have a lot of equity - The SVR should allow you to pay 1000 pcm a month without any additional charges


I have worked out roughly the Interest saving you will pay and how the overpayment reduces the term :

Without overpayment:23 years£81,678.75With overpayment:11 years, 11 months£37,095.02

You will cut 12 years off your mortgage and save about 44k in interest by overpaying 350pcm staying on the SVR

Although this is only a rough prediction using web based 'mortage overpayment calculators' its an amazing outcome

Good luck !

Chezis21

My house is worth around £200K in the current climate. Houses here( Prestwick SW Scotland ) have not fallen as far as some places.
I have about 45-50% equity in the house.

I looked on the Leeds website and most of their deals are for new customers.

I will shop around for re-mortgage deals and perhaps try and use some leverage with the Leeds for a better deal by telling them I am going to switch. Ideally I am looking for better rate but also the facility to overpay as I would like to get rid of the mortgage in as quick a timeframe as possible.

Thanks for the responses they are much appreciated.
Chez

asajoseph

Have you made sure that their are no early repayment charges?

I'm just about to come off a 4 year fixed rate with Northern Rock (this month), but there's a £3k charge to pay if I redeem the mortgage before next April. I've been looking at buying a new home, and was willing to swallow that charge, but the longer things drag on the more tempted I am to just wait it out.

I personally think it's a tricky call as to what to do with your mortgage now - my personal opinion is that rates will begin to creep up in the new year, and banks that were perhaps slow to pass on the rate cuts will be far less hesitant when passing on the increases. I'm quite fortunate - the Northern Rock SVR is lower than my fixed rate, so my interest payments will go down (I'm overpaying too), but I want to fix sooner rather than later, because trackers will get burned before too long I fear.

Chezis21

The penalty only applied if an overpayment was made during the 3 years fixed period. As it ends on 31/10 I am free to move the mortgage without penalty.
I'm going to set some time aside and do some more research and perhaps get in touch with a mortgage broker for more advise. I want to clear the mortgage off as soon as I can which could possibly be 10 years or perhaps earlier depending on my earnings over the next few years. I own a business an we are experiencing growth at 14% this year. Long may it continue!:T