Help with mortgage at end of fixed rate

awaygill

Hi everyone,
I have never posted on an internet forum so I thought I would give it a go to see what response I get.

I have a mortgage with First Active (now part of RBS I believe) that has just come to the end of the fixed rate term after 5 years. I was fixed on a rate of 5.49% and my statement says I will now move on to the long term variable rate of 1.6%.

The mortgage has £118,574.56 left to pay on it and is due to end in 2037. I originally paid £125,000 for the house 7 years ago in South East England so at a guess I would say its worth around £130,000I was paying monthly payments of £725 but these drop next month to £489 based on the new variable rate although I have set up to continue paying £725 to get the mortgage paid off quicker.

Based on the information given should I leave the mortgage as it is, set up a new fixed rate with First Active or look for a new deal and move the mortgage.

Im not great with understanding figures and mortgages and have looked on Google but am getting rather confused with all of the different terms used and options available. Any help or advice will be appreciated

Thanks Paul

Gary123456790

Hi,

Is it 1.6% above base or 1.6% total? Either way that rate is amazing, as can be seen by how much your payment is dropping (far less interest to pay each month), and it is much less than you could get from any other current deal.

As it is variable it may change but for now you are probably best staying put as the rate is so good. You are very wise to continue to pay the same amount as this will mean it takes years less to pay off your mortgage.

Your current LTV is about 91% which would mean if you tried to get a new deal it would be costly, somewhere around 5% i.e. a lot higher than you are on at the moment!!

Gary.

Morgage_Confused

i make it 1.6 total.....wow.....

dont do anything.....just keep paying as you are..dont let them tempt you to make a new deal.

awaygill

Hi Gary,

Thanks for your response, thats pretty much what I thought but I was not sure. Basically my understanding is my interest rate will need to increase by 3.89% to make my payments what they have been in the past, which is unlikely to happen quickly I understand, so by staying put and overpaying I should be fine I believe.

I think the interest rate is 1.6% total as I have put the figures in to mortgage calculator and entered 1.6% as the interest rate and the monthly payments came out the same as what the letter says I will be paying, so it cant be 1.6% over the base rate can it?

All the statement says is from the 29 Feb 2012 the interest rate charged on this mortgage will be 1.6% variable. I did try to call them to confrim this but I spent 20 minutes on hold without getting through.