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Leaving a 125% mortgage and wanting to buy a new house....

blueelephanttrunk · 2011-05-03 14:48:22

Hello all, Just after a bit of advice really! We bought our first home in 2005 with a Northern Rock 125% Mortgage which had a fixed rate of interest of 5% for 5 years - this expires in December this year (Yippee!) Stupidly a couple of years into the mortgage we borrowed against it for £5000 - which means we now have the…

Comments

pinkteapot Posts: 8,044 Forumite

4 May 2011 at 12:13PM

If the house cost £89k and you initially borrowed £91k (the £86k plus the £5k secured loan), then your mortgage was 102%. £91k is 102% of £89k.

So, the good news is you had a 102% mortgage, not a 125% mortgage.

If you had taken a 125% mortgage on a house that cost £89k, you would have borrowed £111k and then you would be in a mess.

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