fixed rate ending

Babymerlin

hi there

we have been trying to sell our house since june 2010, no luck, no offers nothing. anyway, when we went to see our mortgage people (halifax) he said that when our fixed rate runs out in feb 2011 then our payments will go up....... but will go down if we buy a new house..... at the time i wasnt listening properly i dont think, and now thinking that cant be right!? we are on a fixed rate at about 5.5%, so really it has to go down.....right???? even if we move or not???? now im worried......

BoGoF

According to the Halifax website the SVR is 3.50% and this is the rate you shoudl revert to once your fixed rate has ended so your payments will go down.

Either you have picked him up wrong or he is being naughty

originalmiscellany

Look in your paperwork with your mortgage provider. It will tell you what the SVR (standard variable rate) will be.
It will say something like Bank of England rate + 3%. It will be in there somewhere honest!
or give them a ring.

It's unfortunate to say but house buying, mortgages etc require a huge amount of time to read carefully, check the small print etc.

so
a) Fixed rate at 5.5% till Feb 2011.
b) Then SVR - but at an unknown level.


c) Your options are to:
1) Stay on the SVR if you're happy with the amount you pay (almost certainly less than you currently do)
2) Re-mortgage at say a fixed rate for a set length or a tracker mortgage for a set length.
3) Move to a smaller house, thus have a smaller mortgage and lower payments (in theory)


Qns if you want to move, what's the value of the house to the amount of the mortgage to pay? Depending on the Loan to value (amount borrowed vs value of house) depends on the deals you can get. The less you're wanting to borrow the better really, as it shows to the banks you're not that much of a risk.

Hope that helps?

dimbo61

Well the good news is that now your fixed rate is nearly over you will not have to pay any ERC if you do sell the property.
When you go onto the SVR you can either save the money you are not paying to the mortgage in to cash ISA,s to help when you move ( fees,searches ETC) or overpay the mortgage each month to build up the equity in your home

Babymerlin

thanks everyone.

i didnt think he was right, but to be honest i did think i didnt hear him right so not saying he was being naughty, he has been very helpful to be honest.

i was hoping payments would be going down at end of fixed rate seeing we have been paying high interest rate for a while and needing a few extra ££ in our pocket to be honest.

and if we could sell our house we would be moving to a smaller house.....just cant sell!!! we were moving to smaller house to save money, not just on mortgage but bills, etc.

thanks for yoru help.xx

getmore4less

were you going to change your term if you moved, making it longer would reduce the payments.