Fixed rate soon ending - unsure what to do next

fluffy123

Hi all, we're currently in the last 3 months of a two-year fixed rate with Coventry BS at 3.49%.

Paid 158k for our home and put down 10% deposit, have paid the expected monthly payments so far (£707) and will stand at around £135,000 remaining on the mortgage when the fixed term ends in three months.

I know that we go onto Coventry's SVR after the two-year fixed term ends but I'm unsure what to do next. Do I choose one of their existing customer deals online (does the house need to revalued as it may have gone up?) or do I wait for them to contact me or do I shop around? Does that require a new survey etc too?

As this is the first time we've encountered this, hopefully next time will be a bit easier for us :rotfl:

Thanks in advance for any help/advice.

kingstreet

Ask Coventry about its existing customer retention products and look at potential remortgage options with other lenders.

Look at recent (last four months) sold prices for similar property in the vicinity (less than 0.5 miles) as these "comparables" are used by surveyors in establishing valuations.

fluffy123

Thanks, comparible houseprices have gone up 10k since we bought ours. Do you know if Coventry BS would take that into account if we went into a new product deal with them or would they just base it off the original price? Be nice if it took us down a lower LTV notch.

We're thinking of a 2-year fixed deal as of now due to the cheaper costs plus we may move towards the end of that period too.

Boredatwrork

Call the bank ask them what they consider your LTV, what the consider your house to be currently worth and what is the best deal they can offer you. they can tell you this on the phone


Then come back here and post it, and we can see if it can be improved on with an alternative deal.

Adrian_Dorr

DefinitlY shop around. For example the nationwide no fee two year fixed will be better value. Also try and get your LTV Under 80% wich in your case means claiming a value of £169000 would do that which would give you a cheaper product (£600 vs £606 per month).

xyz123

When looking at shirt term for such as 2 years, do consider effect of high mortgage fees. £1000 fee can be a lot from u such shirt term mortgage. There re plenty of online calculators which allow you to compare mortgages considering interest rate and fees. We were in a similar situation recently and realised that 5 year fix was not far off shorter fix. Thankfully with less than 50% LTV w had more choice and got a fixed rate with no early repayment charge. But obviously that depends on your circumstances. Good luck

fluffy123

Thanks,

Looking best deals I can get from Coventry:

2 Yr Fixed @ 1.65% (£999 fee added to mortgage)
2 Yr Fixed @ 2.05% (No Fees)
3 Yr Fixed rate to @ 1.95% (£999 fee added to mortgage)
3 Yr Fixed rate to @ 1.95% (£999 fee added to mortgage)
5 Yr Fixed @ 2.35% (£999 fee added to mortgage)
5 Yr Fixed @ 2.59% (No Fees)

This is based off 85% LTV (Zoopla is claiming that the house value is £170k + but I went with a more modest 160k) and we'll have no legal fees to pay as it's all done in-house. We'll have an issue within the next 2-5 years of the house size and whilst we'd love to extend, it'll probably be too much of a cost and we'll need to find a bigger house, therefore my gut instinct is to stick at a 2year fixed for now? It still works out £80/£90 a month cheaper than what we are paying now....

westv

You would have thought lenders would contact borrowers near to the end of fixed rates but it seems some can't be bothered to tempt them to stay.

fluffy123

One thing I haven't taken into account is an early repayment fee. Apparently we will have to pay 1% of the balance if the mortgage is repaid by 31.3.17 (approx £1300), it seems as though this can be added to the new loan though.

Looking at it, would it not be more cost effective to let it run onto the SVR for a month before going into a new fixed-term rate (I believe the SVR is 4.6%) which jumps the monthly repayment up by £100 but even if it was just one more expensive payment, surely it's more cost effective to do that than to do the new fixed term straight after the old one ends and have to stump up an extra £1300? Does that make sense?

getmore4less

Check when your 2y rate really ends.

They are not always exactly 2 years.

fluffy123

Its 31.3.17 - Two years exactly