Advice please, what would you do?

lexington013

Current mortgage debt is circa £133000 with 9 years 11 months remaining.
My rate with the Natwest is 5.85% fixed. The fix is in place for another 2 years 11 months (it was a 10 year fix).
My payments are circa £1491.
As my income has substantially dropped I'm just managing to pay all the bills but next to nothing left over......
My early redemption figure is 2% (I will check this with them this week, at the worst it's 3%).
I have about 50k in savings.
What would you recommend?

nubbins

I'm not qualified to be giving advice but if it was me And depending on property value and I was struggling at nearly £1500 a month I would take a hit on the early repayment charge and other remortgage fees, use approx 30k savings to bring the mortgage down to 100k and start paying my new mortgage at under £900 a month! I am presuming you have a good chunk of equity and good credit history.

amnblog

Unless the loan to value is particularly high (which it would appear it would not be) a five year fix will save you 3% on the rate.


A 3% fee to save 3% a year for nearly 3 years (over £300 pm).


Sounds worth investigating.

lexington013

Many thanks for the constructive replies. I will take your advice and investigate taking the penalty hit, putting 30k towards the debt to get it 100k and taking a 5 year fix to see if i can save £300 per month.
LTV at present is about 63%.

lexington013

Update, applied to the Chelsea building society (online) for a 2 year fix at 1.79%. £11000 over 10 years (on my part I would have reduced the sum down by 25k from the 135k it is at present).
They have replied (underwriters) to say they will only underwrite £64000..........
So I'm at an impasse. I have £50k of savings, a mortgage that I'm paying.
I will contact the halifax (who I bank with) to see if they can help.
Realistically I just need to get my mortgage down to circa £1100 £1200 a month to be able to manage every month.
My take home pay is £2050 a month, and I only have utility bills as direct debits. I have cut everything else out.
£1491 a month mortgage+ council tax, utility bills, petrol to get to work and food leave nothing at the end of the month........

LeoTLion

It would be a really good idea to speak to a broker before you go applying for different products.


Doing multiple applications won't look good on your credit record and may prevent you getting the best deal possible.


There are fee free ones you can use, L&C being the most prominent, if you are short of cash atm. But investing a small amount now would, in my opinion, be a wise investment and be beneficial for you long term.

dimbo61

The first thing I noted was that you had £50,000 in savings well done !
Now I hate giving one penny more than I need to any lender and an ERC of 2/3% is a lot of money.
If you can ? I would ring the mortgage centre of the Natwest and ask the question " does my mortgage with you allow overpayments "
Even on a fix most allow 10%
I would then use £13,500 of my savings to overpay the mortgage.
This will reduce the monthly mortgage payment.
Use savings to make up the short fall each month and Look at All your Spending to see if you can cut back or save ( smaller more economical car )
Next year when you can pay off another 10%
When your current deal runs out see what the Natwest are offering existing customers. ( This should be on there website )

andyfromotley

If you can't remortgage you could take the amount you were happy to pay as an erc 3% = 4k and give yourself this amount divided monthly. £114.

Whilst i accept that its not ideal it could offer some relief.

Other than that get a decent broker. If they are willing to underwrite 66k you may be able to find someone more generous and perhaps get to 83k and use all of your savings. ( a big blow i know but 83k on a 5 year fix comes in at £360 per month - which leaves huge scope for rebuilding your savings)

getmore4less

Whats the followon rate.

7 years ago some lenders were doing good trackers no idea about natwest.

You might be throwing away a cheap future for the sake of using some savings now.