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Go to Variable rate for a while, after Fixed ends (then return to Fixed)

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I am on 20 year mortgage with  2 year fixed rate  which ends in May. We are currently starting loft conversion, which, when finished, would add a value to our house.
However I don't think it will be done before our current fixed rate ends. 
So I though we could just let our mortgage roll to variable rate for a while (couple months perhaps) until we finish conversion, then valuate house and take another fixed rate.
Is it possible? I do not see examples as such described anywhere. Its just always mentioned you don't want to go on variable etc.. I get that -  I don't want to pay 20 years variable, but couple months, for sake of revaluation?

Comments

  • MWT
    MWT Posts: 10,273 Forumite
    10,000 Posts Fifth Anniversary Name Dropper
    How much of a difference do you expect the improvements to make to the LTV?
  • TBH  I haven't done estimates yet. I read that it can add up to10% -  20% to the value of property. I am not 'professional' in this area - but thought  you would want to specify if your house has greater value, rather to wait another 2 years until next re-mortgage. I might loose some money on SVR, but if it is short term, was hoping to gain, when new, better fixed deal is signed.
    However need an assurance I  can get new FIXED, after rolling on to SVR.
  • K_S
    K_S Posts: 6,880 Forumite
    1,000 Posts Fourth Anniversary Photogenic Name Dropper
    @LittleBrownHouse Whether you're on an SVR or a fixed rate makes no difference to your chances of being able to do a product transfer (staying with the same lender) or a remortgage (moving to another lender)

    I am a Mortgage Adviser - You should note that this site doesn't check my status as a mortgage adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. 

    PLEASE DO NOT SEND PMs asking for one-to-one-advice, or representation.


  • However If I take new fixed rate now (before renovation is finished)  and lets say 4 months in re valuate the house and would like to get a better deal (with the same provider) - would they not charge me early repayment fees (or whatever they call them) for changing my product before fixed term ends? I was under impression that you do not want to make any changes within fixed term, hence thought SRV is more flexible.
    Thank you for explaining terms (I will look for the product transfer as hoping to stay with same lender).
  • MFWannabe
    MFWannabe Posts: 2,458 Forumite
    Part of the Furniture 1,000 Posts Name Dropper Combo Breaker
    What’s your current ltv? 
    What do you estimate new ltv will be? 
    MFW 2025 #50: £1139.75/£6000

    12/06/25: Mortgage: £65,000.00
    07/03/25: Mortgage: £67,000.00
    18/01/25: Mortgage: £68,500.14
    27/12/24: Mortgage: £69,278.38 

    27/12/24: Debt: £0 🥳😁
    27/12/24: Savings: £12,000

    07/03/25: Savings: £16,500

  • K_S
    K_S Posts: 6,880 Forumite
    1,000 Posts Fourth Anniversary Photogenic Name Dropper
    edited 12 January 2021 at 12:07PM
    @LittleBrownHouse Yes, an ERC will be due if you want to exit a fixed product 4 months into the term, even if you are looking to stay with the same lender.

    I am a Mortgage Adviser - You should note that this site doesn't check my status as a mortgage adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. 

    PLEASE DO NOT SEND PMs asking for one-to-one-advice, or representation.

  • MFWannabe my current LTV is 55.17% and new LTV should be about 49%
  • Thank you K-S for reply.
    Of course I would like to avoid ERC, hence I am reluctant to look for new Fixed deal, before I can re valuate my property and that means to roll on to SRV, after my current fixed rate ends, finish renovations, ask for new valuation and look for new Fixed rate, with new value in mind.
  • MWT
    MWT Posts: 10,273 Forumite
    10,000 Posts Fifth Anniversary Name Dropper
    MFWannabe my current LTV is 55.17% and new LTV should be about 49%
    It looks like you are in a range where there isn't a lot to be gained from reducing the LTV.
    I'll let the brokers comment on just how much of a difference it would make to reduce the LTV further through revaluation...

  • @MWT Thank you MWT..I think you are absolutely correct. I should utilise mortgage calculator first. As you mentioned - difference seems too small for me to benefit on better deal. I played around mortgage calculator and seems even with my best predicted property value (after increase) I get offered the same rates as with current value :(.
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