Should I look for a new mortgage deal ??

kevh1980

I am in a fixed mortgage until the end of July 2010, I am with the C&G and my current rate is 5.9 % but will change to their variable rate (2% above the Bank of England Base Rate) when my current deal expires.

The mortgage I took out was for 162k and I have only been paying the interest for the past 2 years (as I was a first time buyer I needed my payments to be as small as possible until my finances settled) the property is worth about 182 so I still have a 90% mortgage.

Does anyone know what my best option now is i.e :-

Wait until my current deal expires and hope the BOE base rate is still low therefore reducing my monthly interest allowing me to make overpayments.

Approach C&G for a new fixed deal which will hopefully have a lower rate than my current deal.

Start looking for a better deal with another provider.
Thanks

Cannon_Fodder

What early repayment charges apply to your C&G product?

If more than a couple of hundred quid, I'd wait for July to see what you drop onto and what is available then. If C&G offer a fresh product in the run up to July, you can then compare with the rest of the market, timing it to avoid ERCs, if another lender is more competitive.

_Andy_

90% interest only is going to rule out changing to another provider pretty much

motch

Looking at their website, at 90% LTV you wouldn't get a better deal with C&G not fixed anyway, the tracker is about 4 or 5% (+fee) up to 85% LTV for two year deal. Then you'd probably pay a penalty to leave early.

dimbo61

Looks like you will be going onto the SVR so if you are then saving money start to overpay each month by at least the amount you are saving IE 2.5% instead of 5.9%
You should also be paying extra ( how are you going to clear a £162k mortgage?)

kevh1980

My plan was to pay interest only for the first 2 years then try to get a repayment mortgage over 23 years. Now I also have the other half living with me to contribute we are both in a better position than we would have been if started straight off with the repayment.

The ERC is about £800 - my only concern is that the general election and the change in government may have an effect on the interest rate.

I guess there is no harm in contacting C&G to see what products they have available to me now ?

_Andy_

Well 90% with no repayment vehicle will definitely restrict you to your current lender.

opinions4u

kevh1980 wrote: »

My plan was to pay interest only for the first 2 years then try to get a repayment mortgage over 23 years. Now I also have the other half living with me to contribute we are both in a better position than we would have been if started straight off with the repayment.

So change this now and either overpay or move to repayment.

The ERC is about £800 - my only concern is that the general election and the change in government may have an effect on the interest rate.

There is so little between the major parties that I doubt it will make the slightest difference. Don't waste £800.

I guess there is no harm in contacting C&G to see what products they have available to me now ?

No harm unless you take an alternative out. Stick with what you've got, keep your fingers crossed that BofE doesn't rise too much and make sure you have a contingency fund just in case.

dimbo61

There is no point paying £800 in ERC for a deal that finishes in 5 months
You have little if any equity in your home so will end up on the follow on rate from your lender ( which is good my the way)
If you go into C & G they may well try to sell you a new deal with fees
and check carefully what the follow on rate would be!
Like I said better to wait till July and then start to overpay as much as you can afford