Mortgage coming up for renewal. Help please.

fin170703

Hi all,

I'll start by saying that I'm not particulalary converse with the world of mortagages.

The reaon i'm posting is to see what my best options would be in reference to my mortgage deal coming out of its fixed term.

I am currently with the Halifax and have been on an interest only, fixed 5 year deal @ 5.9 %. This is up for renewal in December and I'm not sure what to do ?

The obvious option would be to remortgage on a better deal but my problem is that my mortgage is for £112,000 and my house is currently only worth approx £116,000 making it virtually impossible to remortgage. I would like to start paying my mortgage off and someone mention that I should stay on my current interest only set up and just go onto the Halifax's std variable rate but keep the payments the same (currently £600 per month) Really not sure about it though ?

Could you guys give me any advice on what you'd recommend ?

Thanks in advance

Craig

sammyjammy

I'm not sure waht Halifax policy is on the negative equity but I've just moved over onto their fee free 4.69% for three years, if they will let you move onto it then you could keep your paymetns the same and therefore overpay even without changing over to repayment, this would give you a cushion if you needed to reduce them to the minimum payment, yes you could od the same on SVR but its a big risk if rates rise.

ETA - I've just realised this deal is for 75% LTV or less, give them a call and ask thme what your options are it may be that because of the NE you'll have on choice but to stay on the SVR and over pay as much as you can whilst the rate is low.

dunstonh

Mortgages do not come up for renewal. Your mortgage will continue. It is only deal that is coming to an end.

You have some snags in that it is unlikely another lender would consider you as your loan to valuation isnt good and a new lender would almost certainly want you on repayment basis.

What will be your interest rate when the deal expires? Will it be a tracker or Standard Variable rate you move on to?

You need to know what you have first before you try going shopping for alternatives.

mortgage-adviser-now

Halifax will 'stretch' the loan to value on their products for an existing client.

You will probably therefore find that they can offer you a fixed rate from 4.89% or tracker from 2.99%.

Check with them and get independent advice if you don't like what they say.

Hope that helps

I am a Mortgage Adviser

You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice

dougk_2

sammyjammy wrote: »

I've just realised this deal is for 75% LTV or less, give them a call and ask thme what your options are it may be that because of the NE you'll have on choice but to stay on the SVR and over pay as much as you can whilst the rate is low.

The OP is not in NE as the house is worth more than their mortgage - its only NE if the mortgage exceeds the value of the property (thoughin this case there isn't much equity)

sammyjammy

dougk wrote: »

The OP is not in NE as the house is worth more than their mortgage - its only NE if the mortgage exceeds the value of the property (thoughin this case there isn't much equity)

Indeed you're right, I know what negative equity is, I must have misread it!

tomba_2

:eek: BEWARE!!! If your 'early redemption period' still applies then you will face a HEFTY PENALTY! ....just because your 'deal' is coming to an end doesn't mean that you will avoid a penalty...read all small print! I just got caught out by a very badly worded "ends 01/10/2009" Cumberland BS deal....£900 it's cost me (but i'm going all the way!). you may face a 3% penalty even if you are only a few days within the period (£3,000 on a £100k mortgage).

fin170703 wrote: »

Hi all,

I'll start by saying that I'm not particulalary converse with the world of mortagages.

The reaon i'm posting is to see what my best options would be in reference to my mortgage deal coming out of its fixed term.

I am currently with the Halifax and have been on an interest only, fixed 5 year deal @ 5.9 %. This is up for renewal in December and I'm not sure what to do ?

The obvious option would be to remortgage on a better deal but my problem is that my mortgage is for £112,000 and my house is currently only worth approx £116,000 making it virtually impossible to remortgage. I would like to start paying my mortgage off and someone mention that I should stay on my current interest only set up and just go onto the Halifax's std variable rate but keep the payments the same (currently £600 per month) Really not sure about it though ?

Could you guys give me any advice on what you'd recommend ?

Thanks in advance

Craig

Gorgeous_George

Halifax's SVR (standard variable rate) is 3.5%. If this is what your mortgage reverts to you will struggle to beat it.

Their tracker is 4.99% (tracks at BofE base rate + 4.49%) and comes with a £995 fee. It will cost more when base rates start to rise - regardless of what happens to SVRs at the time.

You may qualify for a fixed rate at 6.94% - again with a £995 fee.

I'd do nothing and settle for the SVR (i.e., stay on your current product). IF you need a fixed rate, that is a different argument - but you may be able to mitigate against rising rates without fixing to an expensive deal.

It's a lot of money and you need to understand mortgages. Otherwise, the vultures will eat you alive.

GG

fin170703

Thank you for the help guys.

I'm going to give the halifax a ring tonight and see what they say. I am aware that any advice they give will be strongly in favour of keeping my mortgage with them, hence picking your brains first.

The aim really is to start paying my house off.

I'll note that my house is actually valued at around £125000 but Halifax plucked the £116000 from their data base ?

getmore4less

BE carefull. make sure that the first option is do nothing(they may not mention this one).

then compare the other offers gainst that paying close attention to the follow on rates for any promotional offer.

SVR and overpay is likely to be the best option but this will come with a slight risk that rates rise aganst you. but this is not a long term risk if the alternatives are 2-3 year fixes.

fin170703

getmore4less wrote: »

BE carefull. make sure that the first option is do nothing(they may not mention this one)..

Thank you.

The point I was trying to make, although not particulalary well put across, was that doing nothing and keeping the payments the same might be the best option but they wouldn't necessary advice that.

I'm going to give them a ring in a bit and I'll let you know what they say