My brain is fried, I would be so grateful for some help (low SVR to more costly fix)

Eels100

OK, so 6 years ago I bought a house. I currently have an outstanding mortgage of just over £90k, around 80% LTV. I am on my lender's SVR of 3.99% which is affordable for me at the moment.

Since buying the house I have had two children and got married. My income has reduced (I now work part-time) and I have some debts (credit card, overdraft and car loan).

I was looking at a fixed rate for the next 2 years until my car loan is paid off so I can be secure. I don't think interest rates will rise dramatically or soon but I'm a cautious sort and I don't have great personal knowledge of economics. A mortgage broker has come up with a fixed rate of 4.49% over 2 years, which would be only another £16 a month over what I currently pay. But I will have to find £195 to exit my current mortgage and £250 to have my husband's name put on the deeds so that his income will be considered during the application. It's going to take my monthly cost from £570 to well over £600. Over two years that would pay off half my credit card debt.

I'm sorry it's so long but I think I've added all the information that's relevant. I just don't feel sure I can justify the extra outlay and I haven't got savings to cover the fees as any spare cash goes towards clearing debts. I'm confused!

Morgage_Confused

2 years is not a long fix, also what is the current svr after the 2 years.

Personally I would only look to fix for 5 years. Or just stay where you are and clear those more expensive debts first.
Just my opinion.

Thrugelmir

Overdraft, credit cards and unsecured loan may well impact on your ability to remortgage.

Rather than paying a higher rate of interest on your mortgage along with incurring costs for remortgaging. Paying down the most expensive debt may be a better option.

Jevvers

I don't think the Bank of England will raise rates for a while yet and when they do it will be in increments of 0.25%. So you have two of those before your SVR would match the fixed rate.

Two years is not a long fix and as Thrugelmir says, paying down your expensive debt first would be a good idea.

Also, as you say, you're not just raising the payment by £16, you're incurring these other costs too - it doesn't seem worth it for only two years of security given that you think rates are not about to soar.

You may also ask yourself 'what's in it for the broker?' - have you paid up front or are they on commission?

Jimbo1976

Jevvers has suggested that the base rate won't be going up anytime in the near future and whilst this is correct, you aren't on a rate which tracks the base rate. You are on an SVR which your lender is free to increase under certain conditions. One of those conditions is an increase in funding costs. The issues in Europe have made it much more expensive for lenders to fund mortgages (new and existing) so a large number of lenders have already increased their SVRs in the last 6 months.

I don't think that it is worth you swapping to the fixed rate and paying all of those costs. Have you spoken to your existing lender about what rates it would offer you? There would be no addition underwriting so you would not need to add your husband to the mortgage and deeds purely for income purposes.

As Thrugelmir has suggested it is probably wise to try to pay off your most expensive debt first, ie credit cards (can you swap to the cards?), overdraft and car loan first

Eels100

Dammit, trying to thank you and deleted my post, hate this phone!

Thank you, I hadn't considered trackers. I guess if I can hang tight though and clear the debt then by that time I may also have dipped under 75% LTV which will helptoo. . All change in 3 years when the youngest goes to school!