fixed rate ending

mollymalone10

Hi,

Was looking around at some other posts to see if my query would be answered cant find one similar.

Reason for my thread is i bought my flat in oct 07 with a 103% mortgage (:() anyways, my mortgage was fixed rate for 3 years and was 6.89% so my mortgage rate after that fixed rate i have read on the paperword should be 2.09 above the bank of england rate so i assume it would be 2.59% per month? Also i have negative equity in the flat as i was young, naive and just silly which is still a sore point as my flat is now basically worth about 20 - 30k less than what i paid for it. Does it make a difference that i still owe more than the flats worth now? and should i start getting these lower payments exactly 3 years from when the mortgage started?

Sorry for so many questions just slightly confused.

Thanks

opinions4u

mollymalone10 wrote: »

Reason for my thread is i bought my flat in oct 07 with a 103% mortgage

Ok, so you are basically stuck with you existing lender.

anyways, my mortgage was fixed rate for 3 years and was 6.89% so my mortgage rate after that fixed rate i have read on the paperword should be 2.09 above the bank of england rate so i assume it would be 2.59% per month?

2.59% per year. Not month. This is actually a cracking rate and much cheaper than most people end up paying when their mortgage product expires.

Also i have negative equity in the flat as i was young, naive and just silly which is still a sore point as my flat is now basically worth about 20 - 30k less than what i paid for it. Does it make a difference that i still owe more than the flats worth now?

As I said above. You are stuck with your existing lender.

and should i start getting these lower payments exactly 3 years from when the mortgage started?

Most mortgage products have an expiry date ... for example a "3 year" fix taken out today may end on 30th November 2013. So it can run for slightly longer, or shorter, than 3 years. You will need to check the paperwork.

While you are going to see a reduction in payments when you move on to the tracker rate, you need to assess what to do with the saving that this is going to give you.

You could:

1) Pay off any other unsecured debts at a higher rate faster.
2) Overpay your mortgage, reducing the debt faster and chipping away at your negative equity (also use any monthly payments no longer needed to repay (1) because you've got rid of them).
3) Waste it.

I suggest you look closely at (1) and (2) - option (3) could leave you struggling as and when rates increase. Which they surely will at some point.

Good luck.