have we messed up taking new 2 year fix deal?

missma

Hi all

Just looking your views, we have about a week ago signed up for a new fixed deal with Accord tied in till August 2012. This mortgage is for about £89000 we are due to be paying £569 but are going to over pay to £620 a month.

Thing is we are in our early 30's and feel we want to move possibly within the next two years. Obviously now we would have to stay with Accord and I phoned them today to check their rates for extra borrowing and the guy said was currently 6.49% above base.

Feel we want the security of the fix but now starting to feel a bit trapped to this property

Any advice or comments welcome

Thanks

Thrugelmir

Continue overpaying your mortgage. It takes time to build up equity in a property as a high percentage of each monthly repayment in the early years is for interest not capital. If you are lucky enough to have more disposable income in the future allocate some more to the mortgage.

May seem like an impossible task at the moment but well worth the effort as you'll reap the reward in years to come.

Keep the balance right without paying down the mortgage becoming an obsession.

missma

Thanks, yea trying to over pay small bit from start of this new deal. I suppose is more that this house was never a long term plan, but I there are a lot of ppl ina worse situation. Just feel if we did sell up within next 2 years we would probably be offered a terrible deal from Accord for extra borrowing

VT82

If you only signed the Key Facts Illustration last week, your new mortgage product (fixed rate) might not kick in until next month. They might therefore be able to cancel it.

It's not guaranteed, but worth a grovelling phone call.

If you want to move in the next couple of years, you are better off not being tied into a fixed rate - there will be no early repayment charge to pay, you will have your pick of lenders (subject to affordability and loan to value criteria), and you won't have different parts of your mortgage on different rates with different end dates.

missma

yea hard to know what to do I think for us to move to their SVR is dearer than there fixed at 5.99% really stressed now

frankw5

Do you know if the mortgage is portable? In other words, you can move it from one property to another

missma

Yea is definitely portable, made sure it was. I suppose the likelihood would be at least next summer b4 we could move, by time we sold in current market.

VT82

If you are thinking about upsizing, does this mean you have some equity in the property and a reasonable salary to afford a bigger mortgage? If so, had you thought about remortgaging to another lender before taking Accord's new fix?

It could still be worth giving them a call to demand a cooling off period, remortgaging to another lender with a much better rate, and saving yourself hundreds of pounds.

missma

We have around £20000 equity in the property are current mortgage is £89000. Are joint salaries are about 52k plus a year. Are only other debt is a car loan at £210 a month think about 20 months left on it.

We went through an independant broker, having previously went to Accord directly. The broker advised us that due to house values this was best deal we were prob guaranteed, we could have risked slightly cheaper rates but with costs involved would have not been cheaper in long run.

Maybe we need to just hold tight a couple of years, suppose this was never the long term plan and just feel frustrated.

(Had house on in peak and would have made 100k, wish we had sold and rented but sure no one really knew what was ahead)

geoffky

i think you have done the right thing by fixing...the economic picture of this country in twelve months time will be light years away from what we have today

missma

Thanks all, I think we made the right decision to fix just not sure if its right if we move property not sure there is much we can do anyway. Think we will try save a bit and over pay for next few months and see what happens