Whoops! Fixed Rate about to end

tellmeitsfriday

Hi,

I have just had a letter informing me that my fixed rate deal ends 21/4/09 (I was sure there was a whole year left, but time flies I suppose!)

In the short term, the end of the fixed rate this is a blessing, because it was fixed when rates were higher, and I can benefit from low interest rate for a little while.

However, I am very concerned about the long term (rates must start to rise soon) and would appreciate a little general advice.

I bought the property when it was still possible to borrow silly multiples, when you could get 105% mortgages, and when property prices were high.

My problem is now that

1) I don't earn (quite) enough to borrow 3.5-4 times it's current market value
2) The current value is approximately the same as it was when I bought it 5 years ago (Grr!) so I don't have 25% deposit.
3) I have paid off a tiny amount of the original borrowing, as is always the way at the beginning, so will need to borrow the same again
4) The only deal I can find on the interweb is about 7.5% Fixed for 2 years making cost approximately £200 more than I currently pay, which quite honestly, I don't want to even consider!

Do remortgages come with the same rules as new mortgages or will Northern Rock be a bit 'nicer' with me? I don't think it's feasible to try and change companies due to issues listed above.

Is there anything I can do, does anyone think? Advice appreciated. :rotfl:

Foolishness due to of lack of time noted - but like I said, time flies

With thanks,

H x

TrickyDicky

I think the best thing for you is to overpay as much as you can now to get your equity up. Rates are unlikely to go up much in the next year so get overpaying as much as you can now. Without 10% equity (at least) you have no hope. and 25% gives you a decent rate.