Remortgage help, new deal, low deposit

mysticmaiden2000

Hi all, in sept 2007 i bought my first house with a 95% mortgage because i only had a 5% deposit. I managed to get a 5.2% fixed 2yr mortgage deal with alliance & leicester.
Obviously, my fixed deal ended in sept 2009 and currently i am on their standard variable rate which is quite high compared to some mortgage lenders at 4.99%.
Basically i would like to get a new deal because of the worry of the base rate eventually going up again next year and a fixed deal tells me the fixed amount i need to pay off every month. The problem is that the house value has dropped because of the recession and im not sure if the new value is taken into account with a remortgage.

I am making overpayments of £50-100 most months, have good credit rating and have never missed a payment, also my salary has gone up £4000 since sept 2007.

Can anyone give me any advice? My current lender offered me my current rate of 4.99% fixed for 1 year if i pay £499 fee, which i didnt think was worth getting back in sept when i was offered it as i knew the bank of england base rate would stay low anyway.

Its really frustrating being on the property ladder but not being able to get a decent remortgage, most remortgages need 20%+ deposit for a decent rate or you end up paying a fortune in interest. Is it best to stay the way i am on the variable rate and keep making overpayments until house prices rise again?

beecher2

I think the only option you have is to stay on the SVR and overpay - no other lender will offer you a deal as your LTV will be too high (possibly in negative equity). Try to overpay by more than you are - go onto the Debt Free Wannabee forums for help in cutting back on expenditure elsewhere so as you can throw everything at the mortgage

mysticmaiden2000

thanks beecher, i was thinking i might have to do that, its rather depressing having a mortgage until im 60 and being stuck on my mortgage, unfortunately id pay more but also paying 200 a month on a loan, which should be paid off in 6 months, paid off credit card completely last month. Its even harder buying a house on my own, i guess i should be thankful i could get a mortgage in the first place!!