Interest Only Mortgage

mickh1982

Hi All

My interest only mortgage ran out last year and my payments dropped by roughly £300 and it now tracks above LIBOR by 2.5%

the thing is i have been paying £350 more than what i should for over a year now and as interest rates are reportedly going up would it be wise for me to get a fixed rate over a number of years or just keep as i am???

i know at the moment my LTV is around 90-95% so i know the rate would be around the 5-6% mark which is 2-3% more than what my rate is now but if LIBOR raises rapidly so will my payments which reduces my extra £££ that i'm paying in every month.

and what happens to the extra £££ i have been paying??
Does it come of my capital???

all help would be VERY much appreciated

Wh05apk

At 90-95% you will not be able to remortgage to anything attractive.

I suspect as you are on a libor based rate, you are with a sub-prime lender? I suspect they will not offer you anything, have you tried?

Anything you pay off should come straight off the capital, suggest you continue to overpay, until rates get to such a level you cannot afford to do so.

mickh1982

Thanks

I will carry on to overpay as much as i can obviously its better in the long run to pay as much as possible.

i just wanted some advice on what to do now and in the future as i am not certain of the in's and outs and with the current climate being so volatile i am unsure of what to do.

just out of curiosity what is a good LTV to see to have an attractive rate to fix at??

i know the lower the better but is there an LTV where you see the advantages of fixing

your help and advice is greatly appreciated :beer:

dimbo61

Well 90% is better than 95% and more deals are available of you have 85% LTV. The next step seems to be 75% and the very best deals are 60% and lower so keep up the overpayments they will have a massive effect.