Do we fix?

debtblonde

We bought our house in 2007 for 103k 100% mortgage and was in a 3 year fixed with accord. Currenlty on variable at 5.99%, now we have a 3 year old daughter and are now expecting another baby unplanned at christmas! which is a bit of a problem as its only a 2 bedroom semi, the daughters room is a small box room, we would like to move but theres no chance as no equity and no savings, the only thing i could think off is an extension thats if we could afford that. with the current climate i also thought but was terribly wrong! that if we had any problems ie one of us lost a job i could just change to a intrest only to help being on a variable but when speaking to accord i think u need 30% equity in the house( not sure ). but know we cant go on one.
They have basically offered me a fixed at 5.74% for 2 years.
my gut instint is saying take it, as theres no chance we could move in 2 years anyway and intrest rates are bound to go up soon! Would also overpay slightly on the mortgage say 30-50 a month, and save like mad possible 5-10k in 2 years.

Appricate any1s views

powerwin

What would the other options be?

Rgds

debtblonde

powerwin wrote: »

What would the other options be?

Rgds

i dont know but open to suggestions that i can look into!

horngkai

I think there is not much of an option for you by the sound of it.

No equity or possibly negative equity = no chance of moving unless you have a chunk of savings available now.

Fixing would probably make sense as the variable you are on is actually higher than the fix offered.

debtblonde

horngkai wrote: »

I think there is not much of an option for you by the sound of it.

No equity or possibly negative equity = no chance of moving unless you have a chunk of savings available now.

Fixing would probably make sense as the variable you are on is actually higher than the fix offered.

cheers, thats what were thinking and re asses after the 2 years after hopefully having some savings and slighty overpaying on the mortgage

powerwin

This is not professional advice ...

In general, switching to interest only is a bad idea, because obviously then you are no longer paying for the house.

It sounds like you need to sit tight, but I would suggest shopping around for other fixed rate deals to see if you can beat the deal you have been offered. Obviously you will need to take all exit fees from your existing provider and all new fees from the new provider into account when deciding whether it's worth switching.

Did you look at many providers when you first got your mortgage?

Rgds

Thrugelmir

debtblonde wrote: »

cheers, thats what were thinking and re asses after the 2 years after hopefully having some savings and slighty overpaying on the mortgage

Overpaying the mortgage but what you can afford, will be the best way of saving considering the interest rate you are paying.

Is your mortgage interest only?

lilac_lady

I'd take the deal. It's easier to budget when your mortgage is at a fixed rate. 2 years isn't too long to wait and see how interest rates go.

horngkai

powerwin wrote: »

This is not professional advice ...

In general, switching to interest only is a bad idea, because obviously then you are no longer paying for the house.

It sounds like you need to sit tight, but I would suggest shopping around for other fixed rate deals to see if you can beat the deal you have been offered. Obviously you will need to take all exit fees from your existing provider and all new fees from the new provider into account when deciding whether it's worth switching.

Did you look at many providers when you first got your mortgage?

Rgds

The chances of him/her getting a mortgage from someone else in the current climate are minimal as it sounds like they are in negative equity as it is.

Overpaying as much as you can would be the best saving option as it will hopefully give you some equity on your house. However, you need to factor in the overpayment charges as well depending on your mortgage deal.

debtblonde

Thrugelmir wrote: »

Overpaying the mortgage but what you can afford, will be the best way of saving considering the interest rate you are paying.

Is your mortgage interest only?

No, its a variable rate. The only reason why i mentioned intrest only incase one of us lost our job with the way the current climate is. to help out i though i would be able to go onto a intrest only for a short period, one of the main reasons i didnt fix again at the start of the year, But after ringing accord they have told me with no equity i cant go onto a intrest only

debtblonde

horngkai wrote: »

The chances of him/her getting a mortgage from someone else in the current climate are minimal as it sounds like they are in negative equity as it is.

yeah we would, rough guess i recon it would be about 15k negative