from end of fixed rate to SVR to redemption.

moneysavinggirl40

Is the SVR applied to the outstanding balance at the end of the initial period? For example overpayment has reduced the balance so when the mortgage goes to the SVR there won't be too much difference in the outgoing amount per month. Say fixed rate is 1.94% and SVR is 4.04% at present.

greent

The SVR interest rate will be applied to whatever your outstanding balance is, so if your mtge started out at 100k on the fixed rate but regular payments and OPs have brought it down to 80k and the fix has finished then the SVR will apply to 80k balance.

(I think that's what you're asking?)

moneysavinggirl40

greent wrote: »

The SVR interest rate will be applied to whatever your outstanding balance is, so if your mtge started out at 100k on the fixed rate but regular payments and OPs have brought it down to 80k and the fix has finished then the SVR will apply to 80k balance.

(I think that's what you're asking?)

so even though a mortgage illustration when you originally take out a mortgage says when you enter SVR your payments £x, let's say on 80K. They could well be £y on 70K because you have overpaid. Therefore the illustration is only an approximate projection.

greent

moneysavinggirl40 wrote: »

so even though a mortgage illustration when you originally take out a mortgage says when you enter SVR your payments £x, let's say on 80K. They could well be £y on 70K because you have overpaid. Therefore the illustration is only an approximate projection.

Yes. The illustration is based on no OPs being made, so if the balance 'should' have been 80k without OPs the payment will be £x/ mth when it goes to SVR. If OPs make the balance 70k the payment will be £y/ mth instead, as you've said