Remortgaging Halifax shared ownership (after SVR hike)

sturgeon

My 3 year fixed deal at 4.75% interest (or very close) is running out in May.

I was happy to move onto their 3.49% SVR as obviously it's cheaper than my fixed rate. Now they've obviously bumped it up to 3.99%.

I have a shared ownership mortgage with a 50/50 split. I know they're now offering a 2 year fix at 3.49% with no fee, so this seems like a good idea to me.

The stipulation is that the LTV is 0-60%, wouldn't my LTV be just under 50% (based on the fact I've been paying for 3 years and they lent half of the property value?). Would they still have this deal considering I'm under shared ownership?

I can't see any deals that even come close to this elsewhere. I'm against remortgaging now (unless someone shows me a great deal) mostly as I have discovered a default on my credit record due to bad practice from Santander. The case is currently with the Ombudsman but it could take ages to sort out and for that to be removed.

What do people think? Is it a good idea to go for this 2 year fix?

kingstreet

sturgeon wrote: »

they're now offering a 2 year fix at 3.49% with no fee

You've been offered this or simply seen it online?

IMHO your product transfer option is based on the loan to value of your share.

If, for example, your share is worth £100,000 and your outstanding mortgage is less than £60,000 then you would qualify for this product. However, if the value of your share is £100,000 and your outstanding mortgage is £90,000, then your loan to value banding puts you in the 4.49% rate.

It may be worth clarifying this with Halifax, as I have never done a product transfer on a SO case.

gazfocus

No because you only own 50% of the property so that 50% is what's mortgaged so the LTV is based on that 50%

sturgeon

Ah ok. Well my mortgage for my share was £75k, I probably owe around £71k now. So this seems a bit pointless?

I saw the offer on their website. I then don't get why I'd go onto a fixed product at a higher rate than their SVR. Which I'd say was unlikely to increase anytime soon seeing as they've just put it up.

kingstreet

Well my mortgage for my share was £75k, I probably owe around £71k now

Ok. We need to know the value of the property, so we can calculate the loan to value of your mortgage as a percentage of the value of your share. Any idea?

I then don't get why I'd go onto a fixed product at a higher rate than their SVR

Fixed rates are there to enable those with fixed incomes to budget easier in the future with the knowledge their mortgage payments aren't going to rise. A slightly higher rate now may not always be higher than the alternative in the future.

opinions4u

I'd hazard a guess that they will offer you the 4.49% rate. fixed for 2 years.

http://www.halifax.co.uk/mortgages/existing-customers/switch-to-a-new-deal/

JimmyTheWig

sturgeon wrote: »

I saw the offer on their website. I then don't get why I'd go onto a fixed product at a higher rate than their SVR. Which I'd say was unlikely to increase anytime soon seeing as they've just put it up.

I would imagine that it will increase when the Bank of England base rate goes up. That is a "when" not an "if", but whether that happens in the next two years or not is anyone's guess.

Personally, however, I'd stick with the 3.99% variable than go for a 4.49% two year fix.

Did you put down a deposit when you bought your share of the place? Or did you buy your share for £75k 3 years ago?

sturgeon

Ok thanks for the help so far!

The value is probably around £160k-170k (I bought for 150k) based on other selling prices for very similar appartments in the vicinity.

I see the benefit then of fixing for 4.49% but it's not a great deal is it. As I said I will consider looking around, but due to the default issue I do not want the hassle of others turning me down plus the product fees and valuation fees etc don't really make it seem worthwhile on a relatively small mortgage.

kingstreet

If the property is worth £170k, that means you have a mortgage of £71k on a value of £85k or a LTV of 83%. You'd fall into the next band down, which is 4.39%.

If you're going to look at alternative rates in future, look at 80% and higher, and make sure you look at ones available on shared ownership as most lenders have separate products.