Mortgage Deal Coming to an end... Help!

pinkmoo · 1 March 2011 at 6:43PM

Hi!

Hoping for a bit of advice really as i'm not manageing to get my head around my mortgage info

These are my circumstances:
5 years ago in Novemeber me and my husband took out a mortgage with a fixed rate.
We believe our house will be in Negative Equity come November 2011 (90287.72 left to pay, houses around the area are selling for around 90k)

So these are my queries, any help would be hugely appreciated!
1) Is my house in Neg Eq as I assume?
2) I'm assuming that Neg Eq means I can't remortgage as would need a "deposit" which we dont have in saving or equity in the house, is that correct?
3) This means I have to stay with my current lender, so what does this mean in terms of mortgage payment cost? Mt mtg agreement says:
Loan and Mtg fixed rate 5.99% until Nov 2011 and then variable rate guaranteed to be below Northern Rocks standard variable which is 6.84%

This is where my brain gives up... what does that actually mean? How much will I be paying come November, will I be massively worse off?

This is our first home and we worked hard for 2 and a half years to make it "ours" and now im scared that come November we wont be able to afford it

Please any help and advise would be great!
Pink

pinkmoo · 6 March 2011 at 2:10PM

Can anyone help?

beecher2 · 6 March 2011 at 2:19PM

If your house is worth 90k, you'd only get a mortgage elsewhere for 81k (90% LTV). So until you get down to that sort of debt level, you're stuck on the follow on rate. I'm not sure what their SVR is - 5 point somethign? Concentrate on making overpayments - go onto Debt Free Wannabee forum if you want help on your household budget to enable you to get your debt down.

Wh05apk · 6 March 2011 at 2:19PM

You are in negative equity (just) but it's only a "paper value" at the end of the day it is your home, so don't worry.

You will be stuck with NR, until you get at least about 10% equity, even then the rates will likely not be worth moving for.

I think NR's SVR is 4.79% so currently a 1.2% reduction, so you could save about £90 per month if rates stay where they are.