fixed-rate ending, how best to proceed?

nelsons_column

G'day all,
Your thoughts would be welcome here. 5 year fixed-rate with Yorkshire Building Society is ending in October. We're going to be selling up and moving in July, about 9 months later.

Our 5 year fixed rate, already on a ludicrously high rate (7%) that as naive first time buyers we got locked into, goes up to an even higher rate (about 7.4% I think) in October.

So
a) Is it possible to get a mortgage that is kinda on a monthly rolling contract? (Since we'd need it for this property for 9 months)

b) What typically is the score for moving mortgages to a new property? I wouldn't mind getting a new two year deal (or possibly longer) as long as there was some reasonable likelihood that the lender would be happy for the mortgage to be revised and shifted to the new property.
Our new property is almost certainly going to be less in value than what we sell this place for (moving out of London). But equity is not great, slightly less than 10% at the moment I think.

Got a mortgage advisor appt in couple of weeks, but keen to get some initial thoughts on our situation.

Cheers for any advice.
Mike

dimbo61

Check the paperwork that came with the mortgage!
What does it say ?
Will you go onto the SVR which is now 4.99% OR some form of tracker ?
the paperwork you have now is nearly 5 years old hence 7.4%
If you are planning on moving in 9 months just stay on the SVR until you move.
with a bit of luck you might even be on a tracker with YBS like we are

nelsons_column

Right, the mortgage offer says - "... loan reverts to our Standard Variable Rate, currently 7.65%, after 30 September 2012, for the remainder of the loan."

So, presumably that means the loan will be 4.99% then? (Or whatever the SVR is in Oct?)
That's cheered me a little, I had assumed it would head onto the 7.65% regardless.

dimbo61

No you are right it will be 4.99% which is a little high compared to some lenders SVR so I dont think YBS will be increasing this any time soon.
If you can ask for the mortgage payment to remain static !!!
That way you are overpaying each month and reducing your debt while also increasing your equity ( provided you have no other expensive debts ?? loans/CC debts )
Good Luck

nelsons_column

Will look at what repayments are. For various reasons it would be really good to reduce repayments for a couple of years (childcare costs going from 1 to 2). Plus our mortgage is complicated by a key worker loan, we'll be paying 3% on part of that come October too.

So need to think about this. The mortgage advisor appt will be most useful.

marathonic

I'd consider opening a First Direct account. You'll get the £100 bonus if you mandate your salary into it and move two direct debits or standing orders over.

It's classed as the 'best for customer service' bank in the UK and comes with an interest free £250 overdraft.

Then I'd open a 1-year regular savings account. That'd end when you're planning to move and will allow you to save £300 per month at an APR of 8%.

There isn't much point in switching from your current SVR to a new lender if you know you'll only be there for 9 months (probably 7-8 after the remortgage is complete).