Affordability checks at end of mortgage deal?

d_seng

Hi all,

I have a mortgage with Post Office/Bank of Ireland and the 2 year fixed deal is coming to an end soon.

Very recently, my wife was made redundant so any decisions in principle that I have checked do not cover the outstanding remortgage based on my single income, especially given that we send our daughter to a private school.

However, I do have plenty of buffer in my savings account to cover ourselves for a few years and I am happy to be switched to SVR at the end of the deal (to 4.49% from the current 1.05%) and take the hit of a few hundred pounds extra each month.

She has started looking for jobs again, and I am hoping that she will be able to get into work again sometime soon.

My question is, towards the end of the deal, will my current mortgage provider check my affordability again or will they simply switch to SVR with effect from the new date?

Thanks

Thrugelmir

By default you'll switch to the SVR. Nothing to stop you applying on line for a new product and avoiding the lender undertaking any checks.

d_seng

Thanks for the info.

When you say:

Thrugelmir wrote: »

Nothing to stop you applying on line for a new product and avoiding the lender undertaking any checks.

Do you mean applying online for a new product with the current provider after the deal comes to an end?

PO/BOI do not have an online mortgage management system.

And even if they did (or if I called them), what's the underlying reason they won't perform any checks? Is it because we are already known to them? Will they have any questions around "change of circumstances"?

Lilla_D

Yes, lenders normally ask a question re "change of circumstances" when you apply for a new deal with them. To do things properly, you'd have to wait until your wife has a new job before applying for a new deal and in the meantime footing the higher bill on SVR. As Thrugelmir mentioned, the switch to SVR is automatic, because they can't leave you without an interest rate.

d_seng

Thank you for your valuable input.

I have one last question, if i take a chance and call them for a new deal, inform them of my change of circumstances and if I do not meet the affordability criteria, what happens then?

They won't "void" the mortgage, right? In a worst case scenario, will I stay on SVR?

I haven't had any defaults or late payments, my credit score is pretty high, and in fact, I have made 20% part redemption payments in the last 6 months or so.

Thanks in advance!

d_seng

Sorry to bump this up, please can anybody provide an opinion?