Shocked and a little scared! Mortgage advice please

summer1982

We are currently on a 3 fixed rate until July 2011, we were first time buyers and got a poor mortgage paying 7.89% didn't know at the time how bad that was and dont think we would have gone through with it knowing what I know now, but anyway....

Due to house prices falling I think our LTV is in the 90's%. We were looking forward to reverting to the SVR and overpaying by about £600pm for as long as possible, but after reading another post stating the BoE could rase the rates to as much as 15% (high but possible) this scares me as we could not afford the repayments, what are my options, do I have any???

Can I continue on the deal I am on now (7.89%) and just ride it out until the house prices raise, at the same time I will try and over pay as much as possible each month even if it is only a small amount. Or once the fixed rate ends do I have to source another mortgage and go through the credit checks etc again?

Thanks for any advice

S

mambo69

Who is your mortgage with?

sure rates could rise, but alternatively many are saying by 2% over the next 2 years. get 10 experts in a room and you would end up with 20 different opinions

summer1982

I am with Halifax.

It is SO hard to know what to do for the best, I would love to go on the SVR and overpay and it would help us so much but I don't want to put us in the risky position of not being able to afford our monthly payments, we have worked too hard to get to where we are to risk anything:(

Thrugelmir

Make overpayments you can realistically afford. Over time your LTV will improve allowing you to remortgage.

Can you afford to make any overpayments now?

GuidoT

Halifax SVR is presently 3.5%.

My view is it will be at least 2 years before the Halifax increase their SVR to anything like 7.89%.

Whilst the SVR is not directly linked to the base rate, there is a correlation and I do not see interest rates increasing by more than 1% this year and a further 1% the following year. The 15% is media sensationalism. The Middle East and Japan problems have decreased expectations of a rate rise.

In your position I would go onto the SVR, but keep an eye on interest rates and your SVR. I think with a LTV of 90% you are going to struggle to get a good deal anyway, you will certainly not get 3.5% fees free.

Have a look here for some more balanced views on where interest rates may end up.
http://www.thisismoney.co.uk/interest-rates

It is all bit of crystal ball gazing though.

Try not to worry about what has not yet happened.