Rubbish mortgage deal, help?

DAVESDON

Hi,

We are 1 year into a 5-year fixed mortgage, which is at 7%, costing us £635 per month. The mortgage is for £90,999. We would end up paying more than double that!

According to Halifax, to end now (ish) we would have to pay them over 5 grand!!!

We chose this mortgage as we had a vendor gifted deposit and our mortgage broker assured us it was the ONLY deal if we wanted that deposit. Now we realise she might have been misleading us.

Is it better to pay the penalty and get a cheaper rate, or carry on until the fixed period ends?

thanks

getmore4less

House value?
salary?
Any savings to reduce the debt

LTV might be against you to change

blondehoney1

sorry delegte

Thrugelmir

DAVESDON wrote: »

We chose this mortgage as we had a vendor gifted deposit and our mortgage broker assured us it was the ONLY deal if we wanted that deposit. Now we realise she might have been misleading us.

On what basis ?

DAVESDON

someone we know got a better deal the same day!

the house value was 100,000 but not sure if its changed by now. i am a full time mum and DH earns 19k, no savings

dunstonh

someone we know got a better deal the same day!

Were they borrowing less of the equity? Did they prefer not to have a fixed rate? Would you still have the view if interest rates had gone up?

You buy a fixed rate for certainty of payment. Not to get the cheapest. It doesnt matter to the broker what deal you choose.

Is it better to pay the penalty and get a cheaper rate, or carry on until the fixed period ends?

You need to cost up the deals you can get against the one you are in.

_Andy_

DAVESDON wrote: »

According to Halifax, to end now (ish) we would have to pay them over 5 grand!!!

s

Exactly as per the T&Cs that were clear when you agreed the mortgage - not sure why you're acting shocked.

magpiecottage

DAVESDON wrote: »

Hi,
The mortgage is for £90,999. We would end up paying more than double that!

As it said in the "Key Facts" document you were given at outset as would the details of any early repayment penalty.

Are you telling us you didn't bother to read it? That would normally be seen as the fault of the consumer rather than the adviser.

You are only likely to get somewhere with a complaint if either it was wrong or you can show that a more suitable alternative was available to you from the adviser at the time.

ILW

on that LTV and income I very much doubt if you could get another loan anyway.
If it was a new build the value would have dropped, gifted deposit is just hidden overpricing meaning it would probably be valued even lower.
To be honest I cannot see how you can affford on a total income of 19k

opinions4u

DAVESDON wrote: »

We are 1 year into a 5-year fixed mortgage, which is at 7%, costing us £635 per month. The mortgage is for £90,999. We would end up paying more than double that!

When you pay interest over 20+ years, that isn't unusual.

According to Halifax, to end now (ish) we would have to pay them over 5 grand!!!

As per the terms and conditions of the mortgage.

We chose this mortgage as we had a vendor gifted deposit and our mortgage broker assured us it was the ONLY deal if we wanted that deposit. Now we realise she might have been misleading us.

Many lenders refuse to accept vendor gifted deposits. They are basically a way of saying the house isn't worth the asking price.

For a time, Halifax were one of only a few lenders that accepted vendor gifted deposits as equity. This would immediately narrow the number of mortgages open to you.

If you implied a fear of rising rates, then recommending a longer term fixed product from a lender that accepts VGD seems reasonable.

It's also possible that the affordability model on longer term fixed rates is more generous with Halifax. In other words, the five year fix may have been necessary to secure the amount you wanted to borrow.

This could genuinely have narrowed your choices down to one deal on the market.

Is it better to pay the penalty and get a cheaper rate, or carry on until the fixed period ends?

I'm don't have a crystal ball, so I can't answer the question. How much cheaper would it be? How much would cost you in fees etc? If rates increased to more than 7% within 4 years how would you feel?

someone we know got a better deal the same day!

Unless their circumstances are identical to yours, this means little.

dimbo61

You have security for the next 4 years while you are a stay at home mum.
You had no deposit when you bought the property ( or very little!)
Your OH earns £19K and you got a mortgage of over 5X income at the time!
Have you got £5K to pay the ERC and say £10K to put more equity into the property?
I would stay where you are and enjoy time with your kid/kids and try to get a job in a few years before the current deal ends.
Keep a very good eye on the family budget as you wont have a lot of spare money and if you do have then overpay the mortgage.
GOOD LUCK