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What will happen at the end of my mortgage deal?
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namsoni
Posts: 14 Forumite

Hi all,
My mortgage deal is due to expire in April 2023, at which point I will have approximately £170,000 left. My rough valuation of the property is about £370,000. However, my income has dropped significantly from when I took the mortgage out - I now earn approximately £30,500 per year. I realise that with those earnings I wouldn't be able to take out a mortgage for £170,000 but what happens when you have an existing mortgage? I'm working to try and increase my income before that point in 2023, but also want to plan in case that doesn't happen. When I put in my details in remortgage comparison sites they all seem to find me good deals (I can't remortgage right now due to repayment penalty), but I'm confused as to whether they have properly considered affordability. From my perspective, I can afford my current repayments fairly comfortably and have never been late, but appreciate a bank is uninterested in that
Thank you in advance
My mortgage deal is due to expire in April 2023, at which point I will have approximately £170,000 left. My rough valuation of the property is about £370,000. However, my income has dropped significantly from when I took the mortgage out - I now earn approximately £30,500 per year. I realise that with those earnings I wouldn't be able to take out a mortgage for £170,000 but what happens when you have an existing mortgage? I'm working to try and increase my income before that point in 2023, but also want to plan in case that doesn't happen. When I put in my details in remortgage comparison sites they all seem to find me good deals (I can't remortgage right now due to repayment penalty), but I'm confused as to whether they have properly considered affordability. From my perspective, I can afford my current repayments fairly comfortably and have never been late, but appreciate a bank is uninterested in that
Thank you in advance
1
Comments
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While your product expires in 2023. Your mortgage term , i.e. the period of which you pay the debt is much longer. By doing nothing you'll default onto the lenders standard variable rate (SVR). Alternatively log on online to the lenders website and chose from a new product from those on offer. There'll be no review of your circumstances.
Remortaging to a new lender may not possible if your income remains at the current level. As affordability appears stretched.1 -
A product switch with your current lender seems like the most obvious choice in your circumstances otherwise you will revert to the SVR which is likely to be much higher than your current fixed rate.1
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Assuming this is a standard repayment mortgage and not an endowment.
As others have said, you would fall into the lenders standard plan. Depending on what you interest rate is now, that could mean a change in repayments you have to make as the standard rate may be higher than the deal you are on now. No one knows how significant this difference could be as it depends on your deal and interest rates at the time.1 -
Thanks for all the responses, very helpful. My current rate is 1.74% so the SVR will be higher. But it seems like I will still have the option to switch to a better rate than the SVR with my current provider, without affordability checks?0
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namsoni said:Thanks for all the responses, very helpful. My current rate is 1.74% so the SVR will be higher. But it seems like I will still have the option to switch to a better rate than the SVR with my current provider, without affordability checks?0
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I am in exactly the same boat, reduced my hours to part time and am now stuck product switching with my existing lender at poor rates because I can’t remortgage due to affordability. Hopefully your current letter will offer decent rates0
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Rumour has it the bank rate is going up soon so do not take to sort it out as building society rates might rise as well.0
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