Is getting below 60% LTV the magic number for better remortgage deals?

Bigbobby

I rang Halifax and current estimated value of flat is £94126 - this is not of course the true value but just the Halifax estimate. Current outstanding mortgage is £61755 so LTV ratio is 65.6%. I am currently on SVR rate of 3.99% which is £314/month. I am keen to enter onto a fixed rate before interest rates go up.


To get LTV ratio to 60% I would need to reduce balance to £56475. So that is a further reduction of £5279. I do have savings so could get just below this figure.


I checked out the deals on Halifax website and the deals seem a lot better once you get below the 60% mark. There is an online calculator. I could get a 5 years fixed rate of 2.54% which is £233.86/month.


If I remortgage on my current LTV I am getting offers of 1.99% for just 2 years and 2.99% for 4 years.


Is 60% generally the magic number and is it worth it?

marathonic

Depends on the lender. For example, First Directs best deals are available at 65% LTV

Bigbobby

Thanks. If I enter a Halifax fix term mortgage then a 10% overpayment mortgage rule applies. To date I have been allowed to make as many overpayments as I want being on an SVR without incurring charges.
If I enter a fixed term for example say 1st Aug does the 10% rule only apply from 1st Aug or from the anniversary date on 1st Jan? Back then balance was 67k and I have been making a lot of overpayments since. To get below the £56475 mark from 67k on 1st Jan clearly if the rule applies from 1st Jan I will have overpaid by over 10% and charges would apply?

somethingcorporate

Chelsea BS and Yorkshire BS also offer their best rates at 65%.

You will need to check with the lender on your question as the answer will vary.

kingstreet

Are you only considering Halifax product transfer deals or will you consider remortgaging elsewhere?

If the former, you appear to have little option but to reduce the mortgage balance if you want a lower LTV.

You can pay for a valuation if you think the indexed value is too low.