Remorgage or not

dizzybuff

We are finished on our fixed rate with our provider and due to having not alot of equity we dont think we will be able to get alot of offers . Our provider at present has come back with 3years at 5.79 and 5 years at 5.99 . Bumping our payments up 150 and 180 a month respectivly. Our SVR at the moment stands at 2.99 . We have been advised to stick with the SVR and put money in a savings account as when we need to remorgage we can bring the LVR down as much as we can .

My brain is mush due to a newborn , I just need to clarify and ask advise what would you do ?

CloudCuckooLand

Why did you choose the initial fixed rate deal ? I'd presume a "to know what the monthly payment would be" type answer.

In which case with a newborn, do you really want to flirt with the unknown ?

Is the bumped up payment calculation based on the current SVR or from the last payment of previous Fix ? Don't compare against SVR. Compare against previous Fix.

If rates rise within 3 months, you'll have barely had time to save anything to get the LTV down.

Perhaps research a realisitc LTV. If 99%, get fixed now. If 91%, chance the SVR for 3 months then look for 90% LTV deals..?

dizzybuff

CloudCuckooLand wrote: »

Why did you choose the initial fixed rate deal ? I'd presume a "to know what the monthly payment would be" type answer.

In which case with a newborn, do you really want to flirt with the unknown ?

Is the bumped up payment calculation based on the current SVR or from the last payment of previous Fix ? Don't compare against SVR. Compare against previous Fix.

If rates rise within 3 months, you'll have barely had time to save anything to get the LTV down.

Perhaps research a realisitc LTV. If 99%, get fixed now. If 91%, chance the SVR for 3 months then look for 90% LTV deals..?

the ltv is 95 % no lenders are giving a fixed apart from our own . the bump up is based on the svr , however compared to the last fixed it was around 60 quid dearer . the broker stated that a 0.5% rise is realistic

I have no idea what to doi hubby is happy to stay with the svr. Im just confused as hell.

GuidoT

I would stay with the SVR - you will not get a better deal than 2.99% in particular given your LTV, but keep an eye on interest rates they are only going one way, i.e. up, it is just when and by how much.

You have got the right idea about putting the difference away.

Congratulations on the birth of your new child.

PC_Scorchio

We are in the same boat as yourself. Our 2yr Fixed Rate deal ended in October. At that time our repayments went from £520/month to SVR payment of £220. However, since we've had our house (for the last 4yrs) we've always paid around the £500/month mark.

We accounted for that money every month so we've continued to pay it, in effect overpaying by £300/month. Hopefully this will reduce our LTV before rates get anywhere near silly and we can negotiate a bit of better deal.

I'm not too keen on the uncertainty of interest rates and the knock on effect to mortgage rates but at the moment we have quite a big gap to stay 'safe'.

May be something for you to consider if you're in a position to do so.

PC S.