Are mortgages terrible at the moment, or am I being stupid?!

lilibetla

Hi,

I am new to this forum, but desperate to get some advice from someone not trying to take my money! We have lived in our house for nearly two years and our mortgage is nearly up for renewal. We have £148,000 left to pay on the mortgage, and whilst we have lived here our house has gone up in value from £218,000 to £285,000 (hooray).

We currently pay £550 per month, coming from my husbands salary of £32,000 (working out at £2000 a month after deductions.) I did a quick search on google mortgages, and it looked like our repayments would drop down to around £490 - £510, however when I spoke to our mortgage advisor he stated that it would actually be going up to £600+.

I found this very difficult to understand as I was looking at tesco mortgages at the time and like I say the repayments were much lower. I called tesco and they told me that the maximum mortgage they would be able to offer us is £144,000. This sentiment was echoed by several other lenders, often with a much lower offer.

I just do not understand why they would only be able to offer us less money when my husbands salary has gone up AND we have nearly £70,000 more equity, ALSO the monthly repayments are lower!! Am I missing something?

Any help greatly appreciated! Thank you!

Thrugelmir

Mortgages are not renewed. They last for the duration of the term that you apply for at the outset.

You have a product that lasts for 2 years. At the end of the term your mortgage will revert ( normally) to your lenders SVR (Standard Variable Rate).

Firstly you need to speak to your lender and see what options they can offer you. Once you have this information then consider wider options.

Remortgaging to another lender will incur considerable cost. More to consider than just headline interest rates in making a decision.

Since you originally obtained your mortgage the market has changed. Regulation is tighter. Affordability being based if interest rates were 7%.

alchemist.1

New mortgage rules came in April 2014 with new affordability tests. If you took the original mortgage out before this date, it might be why you are being offered less.

getmore4less

you need to look a your follow on rate and what your current lender retention deals are,
These benchmark what moving lender needs to better, if a move is possible.

amnblog

The £144,000 limit is a simple 4.5x cap on £32,000. You may not even raise that much on a full affordability calculation.

Your current lender however should offer you some options going forward without re-underwriting the case.

ACG

Not everyone is eligigible for the cheapest rates. Part of the reason they can afford to offer those rates is that they take a more conservative approach when underwriting the application.

Your broker could have done the full affordability assessment and so has come back with what he/she knows they can get you. Your oher options are to speak to another broker, try doing the job yourself and going direct or speaking to your current lender and asking what retention deals they have in order to keep you as a customer.

AnotherJoe

lilibetla wrote: »

Hi,

I am new to this forum, but desperate to get some advice from someone not trying to take my money! We have lived in our house for nearly two years and our mortgage is nearly up for renewal. We have £148,000 left to pay on the mortgage, and whilst we have lived here our house has gone up in value from £218,000 to £285,000 (hooray).

Why hooray? Whatever you might wish to buy in future will also have gone up the same percent, making it less affordable.

SG27

AnotherJoe wrote: »

Why hooray? Whatever you might wish to buy in future will also have gone up the same percent, making it less affordable.

Yep the op shouldn't be celebrating. Just makes moving to a bigger/better house more expensive.

Elfbert

Yes, but if the OP doesn't want to move, they will have a better LTV now their property has gone up in value, which may equal a better interest rate on their mortgage. It's only rubbish if you want to move somewhere bigger. It's good if you want to stay put. (Or want to sell the place and live in a tent in the woods).