Mortgage leaving Fixed rate how should I manage this?

dprovan

Hi,

I think I have a basic understanding of mortgages however I know fine well others on here have a far better understanding. I am interested in others views of the situation I find myself in and how I should proceed.

Here is the situation. My mortgage has two parts both were with the alliance and leicester now santander.

Part 1 as of 1/1/10 stood £121,519 with 19 years and 1 month remaining on the term. I was on a fixed rate of 4.79.

This fixed rate came to an end on 1/3/10 and I have reverted to a tracker of 0.95% above base rate. This has saved me approx £200 per month.

Part 2 as of 1/1/10 stood at £99,280 with 19 years and 1 month remaining on the term. I am on a fixed rate of 5.19%.

This fixed rate is due to end on the 31st Aug at which time I am due to move to the SVR of 4.99%.

I have other debts and am using the saving from part 1 of the mortgage to overpay these debts... What I mean is, that I could meet the minimum payments without the £200 extra but as the interest rate on these is 7% I thought it best to use the saving to target those.....

I believe I should keep part 1 as it is as it is some distance ahead of anything else avialable now... However part 2 is obviously less competitive. I am going to phone santander to see what they can offer but have seen on the site two possibilities that I think might be of interest if available to me.... I have 70%LTV.

option 1 5 yr fixed at 4.99% £1000 fee (my thinking is that for the £1000 I would have security on this aspect of the mortgage for some time).

option 2 a 2 yr tracker 2.59% above BOE rate with no fee (my thinking is that for no fee I would be saving instantly and I cannot see interest rates rising that fast to make this worse than staying on the SVR for that time.....

So, I am interested in what people think re my thinking.... Also would you do anything different in my situation... Do you agree option 1 is too good to loose? and when I pay other debts how should I use extra money.... overpay option1 or 2.

shortchanged_2

Are you saying by the fact you have a 30% LTV that your property is worth around £1.5 million or do you actually mean you have 70% LTV?

Because the tracker rate you are quoting is very poor for such a low LTV you are stating.

dprovan

very sorry it is 70% LTV.... I will ammend....

shortchanged_2

Also are you on a repayment mortgage or an interest only?

If it is IO do you have a repayment vehicle in place?

dprovan

repayment..

shortchanged_2

The problem unfortunately is that you only have a relatively small amount of mortgage at the good above base rate deal.
The big chunk of your mortgage is not really at a very good rate.
Have you looked at any other deals or are there any reasons why other lenders will not consider you such as defaults etc?
Also what extent is your other debts? As these can obviously have an impact on any mortgage application.
Your LTV isn't too bad so there may well be better deals out there for you.

For example nationwide have a 5 year fixed deal for a 70% LTV @ 4.59% with no fee or 4.39% with a £900 fee.

dprovan

shortchanged, thank you for the reply,,, i am not doing well here... the figure in part 2 of mortgage was wrong the 3 should have been £ so part 2 is the smaller amount...

I have no defaults re money owed... The unsecured debt is large at 30k on 2 loans and cc. Our combined income is 70k... But I don't think I will want to change lender given this new info re part 2 of mortgage

shortchanged_2

dprovan wrote: »

shortchanged, thank you for the reply,,, i am not doing well here... the figure in part 2 of mortgage was wrong the 3 should have been £ so part 2 is the smaller amount...

I have no defaults re money owed... The unsecured debt is large at 30k on 2 loans and cc. Our combined income is 70k... But I don't think I will want to change lender given this new info re part 2 of mortgage

In that case I would probably be inclined to stick with that deal. There are others on here who would give you much better financial advice than myself like with regards as to the best one to overpay.

Anyway your income to loan ratio is a whopping 7 times so I doubt very much if anyone will remortgage you with those figures.

Why are you accumulating so much debt? Can you really afford the house you are in?
You maybe need to consider selling up and downsizing.

dprovan

shortchanged wrote: »

In that case I would probably be inclined to stick with that deal. There are others on here who would give you much better financial advice than myself like with regards as to the best one to overpay.

Anyway your income to loan ratio is a whopping 7 times so I doubt very much if anyone will remortgage you with those figures.

Why are you accumulating so much debt? Can you really afford the house you are in?
You maybe need to consider selling up and downsizing.

I dont follow... How is my income to loan ratio 7 times? debt 30k income 70k

shortchanged_2

dprovan wrote: »

I dont follow... How is my income to loan ratio 7 times? debt 30k income 70k

It was a reference to your mortgage debt not the unsecured loan.

On the figures you originally posted you stated you had a combined mortgage debt of over £500,000 (you said 399,000 on 1 and 120,000 on another) which was why I was saying your earnings to mortgage multiple was around 70,000 x 7 = 490,000.

I see now you altered your figures so your mortgage debt is now £220,000, which is quite a difference.

I'm starting to get a bit confused with all the changes you are posting.

kingstreet

shortchanged wrote: »

It was a reference to your mortgage debt not the unsecured loan.

On the figures you originally posted you stated you had a combined mortgage debt of over £500,000 (you said 399,000 on 1 and 120,000 on another) which was why I was saying your earnings to mortgage multiple was around 70,000 x 7 = 490,000.

I see now you altered your figures so your mortgage debt is now £220,000, which is quite a difference.

I'm starting to get a bit confused with all the changes you are posting.

There's helpful stuff in the OP's thread from last week as well,

https://forums.moneysavingexpert.com/discussion/3184836

and this one from January;-

https://forums.moneysavingexpert.com/discussion/2997078

No offence intended to the OP, but a one subject to one thread rule on here would really help. I have to keep looking back to find out where I left off so I can continue the same advice.