Mortgage

oligopoly

Hi, we bought a house last September. Price was £353,000 and our mortgage was £244,800 (LTV of 69%) on a 2 year fixed. The term is 35 years so monthly repaymnents are £763.

The amount borrowed was against my salary of around £40 (which includes £10k bonus based on previous payslips) and my wife's self employed earnings of around £12k.

2 questions:

1) I have it in my head that we were almost fortunate to borrow this much money - some banks wouldn't lend against bonus money at all. Is it possible that our monthly repayments could jump quite considerably when we come to remortgage in Sep 18 - especially if my wife's earnings drop through pregnancy for example (i know nothing is assured in terms of interest rates etc).

2) I am looking at borrowing around £6k to buy a used car on a 2 year repayment plan but am worried it might impact our chance of getting a good mortgage deal when the current one ends its promo rate of 1.59% in Sep 18. Is this me being paranoid or should it be a legit concern?


I suppose what I'm really trying to say - and I'm quite naive when it comes to mortgages - is if I'm near the ceiling of what I can borrow and we're already stretching what banks will lend, then am I right to worry about little things which could stretch us further (borrowing £5k on a credit card / having a baby and the subsequent lower earnings). Might I not be able to get a similar mortgage again and risk continuing on the now non-promo rate (4% / £1,067) indefinitely ?

Keezing

I'd say affordablity must have been pretty tight on this application.

You don't say who your lender us, but it's likely that you'll be able to take a 'retention' rate to renew your mortgage, i.e. you can switch deal with the same lender instead of staying on the SVR, without any further affordability checks.

However, who knows what rates will be like in September 2018? You should plan your finances accordingly.

oligopoly

It's with NatWest. I guess none of us know what the world is going to be like in 18 months. But good to be cautious. Suppose I can always flog the car if we get desperate ��

Keezing

So NatWest offer a switch online.

The current NatWest retention rate for a sub 70% LTV on a 2-year fix is 1.99% - with no affordability checks.

oligopoly

Keezing wrote: »

So NatWest offer a switch online.

The current NatWest retention rate for a sub 70% LTV on a 2-year fix is 1.99% - with no affordability checks.

Ok great that sets my mind at ease a bit. Thank you for your help.