What to do?

trigger29

Hi guys and gals,

Been reading the site for a while and learnt a bit but now in need of a little bit of advice if available.
Got a £102K mortgage with nineteen years to run. Moved house last year and instead of getting the mortgage lumped together, I noticed when the statements came that the Woolwich have kept my original mortgage and added £73K as an home improvement loan. I suppose I was a bit niave or a bit overwhelmed by the complexities of it all but the following is the position as of today.
We have £28 left on one part which is fixed at 5.89% until end of september 2006.
Then we have £73.5K left on the home improvement part which is fixed until 31 March 2007.
Heres my dilemma. I would like both "parts" together and ideally on the same fixed rate so should I leave the £28K part run at the SVR rate until March 2007 and then remortgage both as one mortgage or is there another option which doesn't incur charges for setting up new fixed rates for either half.
Your collective wisdom would be appreciated.

dwsjarcmcd

I'm afraid there is no easy way out of this than either running the £28k part on SVR to March next year or paying the ERC's on everything to get the whole lot on one product. Without knowing the detail, SVR on 28k is probably the better option

HelpWhereIcan

Agree with dwsjarcmcd, but would add one little bit.

The Woolwich are currently offering a range of 'retention' products that are designed to retain customers when they come to the end of their deal.

These range from a 4.49 2 year tracker to 5.19 5 year fixed rate if your mortgage is less than 75% of what the house is worth. The very good thing about them is the fact that the rate they revert to for the long term is currently 5.45% - a lot better than most lenders' svrs at 6.5%.

I cannot promise that they will do it, but it may be that if you approach them when the deal on the 28k finishes, they will be willing to transfer the whole lot onto one of their retention deals without charging a penalty on the 73.5k.

This may not be as unlikely as it sounds as lenders have been known to be more flexible when the penalties have less than 6 mths to go, but only if you are staying with them and mainly in cases where you are porting the loan to a new property. Not a cast iron guarantee (as I have not tried it with the Woolwich), but it will be worth trying in September, just in case.

Otherwise, advice as per dwsjarcmcd stands.

Hope this helps

trigger29

Thanks for the replies , the advice is most appreciated.