Fixed rate deals, remortgaging and pay cuts

spettifer

Hi all

Fair warning, this is linked to the coronavirus mess we're in.

My wife and I bought our first, and what we hoped would be our only, house a year ago last November. We had to stretch and take a 95% mortgage but the rate wasn't too awful (3.6% or thereabouts) and the monthly payment was roughly what we paid in rent on our last house. Fast forward to now.

I work as a software developer. I have a job which is, or was, pretty well paid and that I love, the first job I can really say that about. Trouble is, we make software for hotels, and the hospitality industry and as we all know things are not going well for them right now. As a result, yesterday we had our hours and pay cut by 20% but with the assurance that when things returned to some sort of normal they would return hours and pay to previous levels asap, and I do believe them as they are a good employer. Event with this cut we are ok for now and we do have some savings which we should be able to avoid using.

However, we were due to remortgage this year and the hope was that with the rise in value on the house and what we've paid we could get a much better rate as we be over 10% equity. There was also an idea that we could do it entirely on my salary meaning we could take a longer term (my wife is a little older than me and I am mid forties). This would free up money to do work on the house or overpay as we chose. But with a 20% cut in my pay, that is highly unlikely now since I expect we'd need about 300k. Even with my wife's salary I'm a bit doubtful we'd get it.

Here's my worry and my question. The SVR would increase our outgoings at a time when, if this is all still happening, I could well do without it, but if we can't remortgage we can't lower our outgoings (the stupid irony - I can afford the mortgage e have still and maybe some more, but their silly tests mean I might not get approved for something that would cost me less) I don't even want to think about negative equity or losing my job altogether as where we live I would struggle to get another of equal salary, especially in a crisis. 

I have heard you can try and lock in a new mortgage rate up to 6 months in advance but my new pay rate starts in April, and I guess an offer might not be honoured if your circumstances change. Is there anything at all I can do other than talk to a broker and hope they can help us find something? My last broker was excellent but I'm not sure if he's still working.

Apologies for any typos, my phone is less than helpful at times.

Thrugelmir

You need to see what your current lender will offer you in terms of follow on products before making any decisions. November is a little way away. Given the current very fluid situation there's no way of knowing what the future may hold.