A little worried about the future

loobie

HI

So, we (me and my husband) have a mortgage with the Halifax for £112000 approx. We fixed it 5 years ago, AT 6.59% and it is coming out of its fixed rate in December 2013. I know its 18 months away, and that anything could happen BUT I was just wondering about what COULD happen.

Our income is £2044 a month, and we pay out £1444 for all bills, d/ds, s/os etc, leaving us with £600 for food, fuel and extras.

If the interest rate stays the same as it is now, will our payments go down? We are on a 50% interest, 50% repayment mortgage.

We can't remortgage as a) we have no equity in the property and b) we got this mortgage on affordability.

I am really scared about what COULD potentially happen. I know that no-one can possibly know the future, but if anyone has any ideas or can give me a little reassurance, I would be extremely grateful.

Thanks in advance.

marathonic

loobie wrote: »

HI

So, we (me and my husband) have a mortgage with the Halifax for £112000 approx. We fixed it 5 years ago, AT 6.59% and it is coming out of its fixed rate in December 2013. I know its 18 months away, and that anything could happen BUT I was just wondering about what COULD happen.

Our income is £2044 a month, and we pay out £1444 for all bills, d/ds, s/os etc, leaving us with £600 for food, fuel and extras.

If the interest rate stays the same as it is now, will our payments go down? We are on a 50% interest, 50% repayment mortgage.

We can't remortgage as a) we have no equity in the property and b) we got this mortgage on affordability.

I am really scared about what COULD potentially happen. I know that no-one can possibly know the future, but if anyone has any ideas or can give me a little reassurance, I would be extremely grateful.

Thanks in advance.

What does your mortgage agreement say that your rate reverts to after the 5-year fix?

I'm not sure about Halifax in particular - a lot of them just revert to the SVR but you could be lucky and revert to a tracker.

Halifaxs SVR is currently 3.99% so your repayments should reduce significantly - although you could continue to pay what you're currently paying to reduce the term. This is the better option if you can afford it.

maninthestreet

loobie wrote: »

.....we got this mortgage on affordability.

Please explain what this means.

foreversummer

Hi Loobie

First of all I would check your mortgage documents to see what happens when your fixed rate finishes. I expect you will go onto the Halifax standard variable rate and no-one at present will be able to tell you what that will be in 18 months time. It may actually be less than you are paying now or it could of course be more. Not a lot of help I suppose.

Do you have any savings or do you manage to save on a regular basis? I would really try to build up my savings to give me a bit of a cushion. It is amazing if you take a really good look at your outgoings how much it is possible to cut back on if you put your mind to it. If you already have savings it might be worth overpaying your mortgage. Even small amounts can make a difference over time.

Foreversummer

harvey115

If you have no Equity built up in the house and you do not have above 15% deposit in your savings to re-mortgage then I am afraid you will not be able to get good deals at the moment.

When you have 15% of Equity + deposit both together even, you are likely to get some sort of deals in the current market given that you meet the criteria of the lenders such as affordability, credit worthiness etc.

I say 15% because most of the deals start getting better from 15% and/or above the deposit mark.

Best of luck