Mortgage help please - new deal during PhD?

taka

My fixed rate mortgage will come to an end in summer 2012. I am hoping to be doing a PhD by the time this happens - either just starting or 1 year in (out of 3 years). I currently work FT. What are my chances of being able to get another fixed rate at this time?

I know its really, really far ahead and who knows what will happen in the mean time with the economy and lending in general... but based on todays criteria would it even be possible or is dropping onto the BMR the most likely outcome?


Info...

• I will have ~£40k outstanding in summer 2012 (currently ~£45k)
• Currently with Nationwide on a 5yr fixed rate. I have been with them since 2002. Currently pay ~£340/month @5.78%
• I would be receiving a guaranteed stipend of £13290 (current rate - tax free)
• Very low LTV - maybe ~40% or less (the last 1 bed flat in my street sold for £150k in early 2007 - most recent 2 bed sold for £155 in June 2009. I have a 1 bed flat.)
• Have a good credit rating, no missed payments, defaults or CCJs etc and have a 2x credit cards which are paid off in full every month, no loans.

Any thoughts? Do nationwide even take into account a stipend as wages? My monthly take home pay while doing my PhD (£1107.5/month as it is tax free) would be higher than when I took out my initial mortgage with nationwide in 2002! The stipend would allow me to pay my mortgage + living costs + save ~£250/month at current levels & rates.

What exactly is natiowide's BMR currently? Its not on their website anywhere I can see - only the SMR (@3.99%) which doesn't apply to me as I took out my mortgage well before the April 09 cut off date. Am I correct in thinking that there was a no more than 2% above base rate guarantee or similar or was that only during a deal? Guess I need to dig out my mortgage info for that answer...

I'm just trying to plan so far ahead to make sure I can afford to pay everything ok while doing a PhD and to make sure I have enough savings in place for those maintenance/repairs/replacements etc that will undoubtedly need doing/buying over the next 6 or so years.

Thanks in advance for any help!

_Andy_

To answer one of your queries - as long as the borrowing amount is staying the same - Nationwide won't care what your income is as the mortgage won't be re-underwritten.

herbiesjp

Indeed your current lender would be your first port of call.

Not many lenders like the bursary/stipend scenario, but you would have some options, so you would need to compare if the deals Nationwide would offer you would be better than anything else you could find.

If it is marginal, then for the ease of everything you may well just stay with Nationwide on one of the deals they offer you - it does not have to be their BMR

jassco

Just to let you know, I'm a PhD student on the same stipend, and both HSBC and Nat West take them as earnings... they class them the same as a fixed-term contract. Originally HSBC turned me and my OH down, but after appeal they accepted our application.

For reference ours is for a 90% ltv at 5.99%, and my OH is in a permanent position.

morg_monster

just to add to the information, Lloyds will not take a stipend as income. Luckily I also have an OH working full time!

nervousftb_3

and to further narrow it down, Britannia and Barclays won't accept a stipend as income (or at least they didn't in April) and C&G will but only take 75% of it into account for some reason!

taka

Thanks everyone... Does that mean it is possible to get a fresh deal with nationwide when my current one runs out without them needing to re-assess my salary as long as I'm not increasing it? I can't remember what happened when I took my current deal out.

herbiesjp

That is correct