Mortgage deal renewal

JETTDT

Hi my wife has just lost her job due to covid.19. Our nat west mortgage is due for renewal after our low rate ends in December. I am concerned that if we take a payment break we will not be allowed on a new deal due to affordability checks. In fact we can keep paying and actually scrape by and am thinking of doing so. However I know the mortgage still wont be affordable on paper, my worry is gst they will actually tell me a new low rate is not affordable but will be happy to make me pay the higher rate. Is this correct? 

Jeremy535897

Most lenders do not do affordability checks on existing mortgagees. NatWest say they don't: see https://personal.natwest.com/personal/mortgages/switch-mortgage-deal.html . If you want to switch providers, the new lender will carry out affordability checks. That is why some of the mortgagees with Northern Rock can't get out of high interest mortgages, although some limited assistance was given.

Grumpy_chap

If you can keep paying, as you say may be possible, then that is the best approach.

Thrugelmir

Mortgages aren't renewed. They'll run their full contractual term. When your current product term is drawing to a close. Go online and you'll be able to apply for a new product from those on offer. 

[Deleted User]

Thrugelmir said:

Mortgages aren't renewed. They'll run their full contractual term. When your current product term is drawing to a close. Go online and you'll be able to apply for a new product from those on offer. 

To be fair "Mortgage renewal" is a fairly common term and the vast majority of people understand it means gaining a new mortgage deal. It might not be the technical term, but then we do not use technical terms for a lot of things.

mattyprice4004

I would personally keep paying, they may associate payment holidays with those closer to the breadline, and thus not offer the best deals to those customers as they're deemed higher risk. 

sharpe106

If you don't need the break then do not take it. It may effect the rate offered when you renew. As they know the risk to them may have increased. Affordability on paper does not matter when the rate renews.

JETTDT

Thank you for replies. My main concern was that they would in some way use it as an excuse to not allow me to go on a new fixed rate but it looks like that wont be the case. 

sharpe106

You should be fine for that, but unless you actually need it don't bother if you can cut your living costs down a bit you be a lot better off in the long run.