Our mortgage

gjs6385

Hi,

When our house was purchased back in July 2007 we took out a 2 year fixed rate mortgage with Alliance & Leicester at 5.49% on which the monthly repayments were around £550.

When our fixed rate ended I spoke to them and they said we had negative LTV and they could only therefore put us on a tracker mortgage, which is either 2.49% or 2.99% (I can't remember which exactly but I think it's 2.99%) above the BofE base rate, which works out great for us at the moment while the BofE base rate is still at 0.5%. We now only pay around £335 per month.

My question is do you think we should stay on this for as long as possible or switch to a slightly higher fixed rate? I know this will depend on the current LTV but I would appreciate people's thoughts.

Thanks.
Gareth.

originalmiscellany

have you improved your loan to value to ensure you've not in negative equity? That' the first thing. It's amazing how much house values have dropped, and as a result you could well be in negative equity still, where the mortgage is worth more than the house.

If that's the case, you'll have to either overpay hugely or accept the tracker rate... Check whether it's 2.49 or 2.99 - not a huge difference but worth knowing!

I think you'd be lucky to get a fixed rate in all honesty, unless you know what your house is valued at, and how much your mortgage outstanding is.

gjs6385

have you improved your loan to value to ensure you've not in negative equity? That' the first thing. It's amazing how much house values have dropped, and as a result you could well be in negative equity still, where the mortgage is worth more than the house.

If that's the case, you'll have to either overpay hugely or accept the tracker rate... Check whether it's 2.49 or 2.99 - not a huge difference but worth knowing!

I think you'd be lucky to get a fixed rate in all honesty, unless you know what your house is valued at, and how much your mortgage outstanding is.

Thanks for your reply much appreciated.

I assume if I just phone them up they will tell me whether or not I still have negative equity i.e. I don't need to get a valuation by an estate agent do I?

As I said, I'm pretty sure it's 2.99% above BofE BR but I'll double check.

I think we will still have negative equity in all honesty but if not would a fixed be better at the moment or should I continue to ride the train of the low rate?

Thrugelmir

gazsharpe101 wrote: »

I think we will still have negative equity in all honesty but if not would a fixed be better at the moment or should I continue to ride the train of the low rate?

Have you considered maintaining your mortgage payments at £550. Thereby starting to make inroads in your mortgage debt.

To improve your LTV in the longer term you need to bring your mortgage balance down or you'll be trapped in this position for some considerable time.

gjs6385

Have you considered maintaining your mortgage payments at £550. Thereby starting to make inroads in your mortgage debt.

To improve your LTV in the longer term you need to bring your mortgage balance down or you'll be trapped in this position for some considerable time.

I don't know if they would charge for us making overpyaments though........

somethingcorporate

Check your mortgage.

Otherwise what are you doing with the extra cash? You need to rely on more than house prices increasing to increase your mortgage options as you could be waiting for a long time.

gjs6385

Check your mortgage.

Otherwise what are you doing with the extra cash? You need to rely on more than house prices increasing to increase your mortgage options as you could be waiting for a long time.

We are using the extra money to pay off other debts whilst the BofE BR is as low as it is, but if it were to increase we would use it to cover the monthly repayments.