Salary dropped, what happens to mortgage?

longwalks1

My salary for the last 3 years has been a lot higher than usual due to overtime and bonuses, and allowed me to borrow enough to move. This year, and next it will drop down again to what it was previously (give or take) so what happens in 3 years when I come to the end of my fixed rate mortgage? I doubt I'll be earning enough to shop around again, so will i just stay on the lenders variable rate?

I will be able to cover it, as I rent a room which goes towards paying it each month.

Landofwood

You may be able to switch to a "retention rate" which does not normally require affordability checks.

longwalks1

Thanks Landofwood, so switching to a retention rate would that mean staying with my current lender? Or could I still shop around other lenders?

If it means staying with current lender, could I sign up for the deals they have on at the time my current tie in period ends?

Thanks again

hcb42

If you shop around, it is a new application and will be subject to normal affordability checks etc.

If you think there is a risk you might not pass, then easier to switch to a (better?) rate with existing lender.

firesidemaid

your other option is to overpay (or save) as much as you can whilst your salary is at its best - that way you probably will be ok to remortgage in 3 years time.


Can you save all your overtime/bonus pay?

BobQ

OP

do not forget in your planning that the BofE expects interest rates to rise at the end of the year so that may be a factor. Is your present rate fixed absolutely or fixed relative to bank rate?

longwalks1

BobQ wrote: »

OP

do not forget in your planning that the BofE expects interest rates to rise at the end of the year so that may be a factor. Is your present rate fixed absolutely or fixed relative to bank rate?

Fixed absolutely, not related to BofE base rate

gentlewoman

I'm interested to hear the answer to this as well. My salary actually increased but my credit card debt increased as well. I read that - if you don't change terms of the mortgage, not asking for more, been making payments on time - they will let you switch to a new fixed rate.