rock and hard place?

tinorangi

Hello !!!

Allow me to explain my dilemma, in the hope that the excellent advice on this forum can help.

my wife and I took out a 95% Home start mortgage with HSBC in January 2007. This is a 25 year mortgage where you pay Interest only at a fixed rate (presently 5.49%) for the first three years, reverting to a mixture of capital and interest for the remainder of the term on the SVR.

Our current repayments are £770 per month and i expect on the current SVR to have these go to over £900 once the fixed rate ends January next year.

Although we could afford the £950 that repayments are likely to go to anything higher is going to be a stretch (we now have a 1 year old that was unexpected at the time of buying and on less money as a unit) Secondly i dont have any extra cash to throw into the property to reduce the LTV to something more agreeably remortgageble and as property prices have somewhat 'adjusted' since January 07 any remortgage to another lender would involve a valuation coming in at what i would guess would be less than the amount owing on the mortgage

Were pretty good debters with the bank having a personal loan with them and a mortgage and never having missed a payment and all this over the last however many years

My questions is this.

1) Are HSBC likely to offer me any deal other than reverting to the SVR for the remainder of the term, i.e. will they say you can go on to to a tracker, that I can extend the term, offer me a different rate or some other equaly exciting variation on debt repayment??

_Andy_

Extension of term will mean the mortgage is underwritten again.
They may well offer you alternatives to the SVR, give them a call and they will tell you what's available.

Captain_Chaos_2-2

HI buddy they HSBC standard Variable rate is currently at 3.94% so payments hould reduce you can give ther mortgage retention team call on 08457662255 to find out what end of termrate they can give if you wanted options but itherwise

looking alright for you i'd say

pwllbwdr

CC I think you've misunderstood. When the fix ends, they simultaneously go onto SVR and switch from interest only to C&R.

It is worth phoning the mortgage centre to discuss it, but I doubt they'll offer a new product unless your LTV is better.

getmore4less

£168500 @ 5.49 = £770pm I/O

£168500 @ 3.94 = £955pm repayment over 23 years


Looking on HSBC site you will need to call them all the deals(on the site) for existing borowers are max 75%LTV.

If you are thinking of switching your mortgage deal check out our fixed, discount rate and tracker Mortgage Specials.


If your Loan to valuation (LTV) is greater than 75%, please call our dedicated mortgage team on 0800 633 5477 (Monday to Friday 9am – 5pm) option 2 to discuss rates that are available to you

tinorangi

:THello thanks for all the advice!

Spoke to HSBC they valued the property at £150k so would not be able to offer anything until the capital was paid down to a 90% LTV That reminds me i must pull that spare £40k out of my nethers when i get the chance.

Anyway, next question that im sure the awesome advice on here will be able to answer.

As ive been paying Interest only for three years does this mean ive paid down the total interest owing on the loan over these three years. or is this wishfull thinking?

Also, does anyone know how much capital i willbe paying off each month when it goes to a repayment mortgage, and/or a usefull link or calculator, or formula that i coulduse to demonstrate this.

Thanks in advance!!!!

benjo

"As ive been paying Interest only for three years does this mean ive paid down the total interest owing on the loan over these three years. or is this wishfull thinking?"

Wishful thinking, you have paid the interest accrued up to the current date. You dont owe more interest now, but you dont owe less interest now - since the interest is calculated (often daily) on the outstanding amount of capital you owe. Until you pay some of the capital off the interest will not reduce.

"Also, does anyone know how much capital i willbe paying off each month when it goes to a repayment mortgage, and/or a usefull link or calculator, or formula that i coulduse to demonstrate this."

Hop over to the mortgage free wanna be section of this forum, there are links to a number of spread sheets that will provide the info you are looking for.

Jonbvn

I would suugest you pay-off your personal loan ASAP, since the interest rate on that will be much higher than your mortgage. Hopefully, that will free up some money for you to make higher repayments.

tinorangi

one extra question....given my situation do you think HSBC will let me switch or even stay on an Interest only mortgage? as with the repayments going to over £900 this will realy kill us in the short term while my wife isnt working. thanks fo again for the advice in advance!

Jonbvn

tinorangi wrote: »

one extra question....given my situation do you think HSBC will let me switch or even stay on an Interest only mortgage? as with the repayments going to over £900 this will realy kill us in the short term while my wife isnt working. thanks fo again for the advice in advance!

I believe that they are unlikely to let you go onto IO. However, you should ask them, they can only say no.

poppy10_2

Pretty sure they'll say no, though.

When were you planning to start paying for your house, as opposed to renting it from the bank?