Taking out an unsecured loan to pay off a secured loan to improve LTV?

ViolaLass

Eastlands70 wrote: »

Nothing can fully safeguard against it but 2.49% variable trumps 4.44% variable comfortably.

A fixed rate and for longer would do a much better job, if security against rises is what you seek.

Eastlands70

kingstreet wrote: »

What a lender does now and what it does in two years' time may not be the same.

I'm sure plenty of Halifax and Santander borrowers would have said two years ago they'll have no problem getting a retention product now.

How wrong they were...

Just be careful signing up to a lender with a higher SVR. Just in case, like!

That's true. They could easily move the goalposts of course.

I'll sit tight and keep chipping away at the credit card balance for now.

Eastlands70

ViolaLass wrote: »

A fixed rate and for longer would do a much better job, if security against rises is what you seek.

I appreciate that - my current low LTV gives me access to very little in the way of fixed rate deals (most are a couple of points above Leek's 2.49% variable rate so bank rate would have to rise a fair bit for the Leek deal to become a poor choice) but will keep a close eye on things over the coming months as my mortgage balance gradually comes down.

ViolaLass

Eastlands70 wrote: »

I appreciate that - my current low LTV gives me access to very little in the way of fixed rate deals (most are a couple of points above Leek's 2.49% variable rate so bank rate would have to rise a fair bit for the Leek deal to become a poor choice) but will keep a close eye on things over the coming months as my mortgage balance gradually comes down.

Are you including fees in your considerations? The deal you quote costs £895, which is not insignificant.

Eastlands70

ViolaLass wrote: »

Are you including fees in your considerations? The deal you quote costs £895, which is not insignificant.

Yes I have. I still think the pros outweigh the cons even when taking the fees into account.

One important point that I forgot to mention is that my current mortgage is with NRAM and as they're not offering new mortgage products to new or existing customers I'm stuck on their SVR so if I want to get away from that in the future I've no option but to change to another lender.

Thrugelmir

Eastlands70 wrote: »

One important point that I forgot to mention is that my current mortgage is with NRAM and as they're not offering new mortgage products to new or existing customers I'm stuck on their SVR so if I want to get away from that in the future I've no option but to change to another lender.

Over time the differential between lenders will narrow. Majority of mutual lenders have higher SVR's even now than NRAM.

Eastlands70

Thrugelmir wrote: »

Over time the differential between lenders will narrow. Majority of mutual lenders have higher SVR's even now than NRAM.

When interest rates do start to rise, do you think it's a possibility that NRAM's SVR might not rise as steeply as the Bank of England base rate?


With some SVR's running 5 points above the current base rate, I'd hope that the gap between the two would narrow as interest rates rise rather than stay roughly as it is now.

Eastlands70

Quick update - after taking some of the advice on board I've decided to shelve this idea (it was a bit daft to be honest) and double my efforts in shifting my credit card debt as soon as possible. From now on, I'm upping my monthly payments to £500 plus any other surplus cash that I might have at the end of a given month. With a following wind I'm hoping to have this cleared towards the end of 2016 at which point I'll start looking at my mortgage payments and see what I can do with those.