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Remortgage or let it lapse to a variable rate until our circumstances change?

Options
Our 5 year fixed expires in February 2023 and currently has a rate of 4.84% as at the time of buying our house we had a 95%LTV, since then our circumstances have changed and I am not working so our household income is about 6k less from when we took out our mortgage (DH works full time and I am a SAHP and student so pre benefits our income is about 26k and current mortgage balance is 136k approximately) however our houses value would be roughly 40k higher.

So the question is do we stick to going onto variable until I start working again a year or so where we would have childcare costs then for 2 years or so we see if we can get any fixed deals on our lower household income, we d be happy sticking with our current provider but if we can find a way to get any product fees added onto the balance we d also consider that? 

Comments

  • ceb1995 said:
    Our 5 year fixed expires in February 2023 and currently has a rate of 4.84% as at the time of buying our house we had a 95%LTV, since then our circumstances have changed and I am not working so our household income is about 6k less from when we took out our mortgage (DH works full time and I am a SAHP and student so pre benefits our income is about 26k and current mortgage balance is 136k approximately) however our houses value would be roughly 40k higher.

    So the question is do we stick to going onto variable until I start working again a year or so where we would have childcare costs then for 2 years or so we see if we can get any fixed deals on our lower household income, we d be happy sticking with our current provider but if we can find a way to get any product fees added onto the balance we d also consider that? 
    Don't go onto variable, it's grossly expensive. From what you have said about your income, you could actually struggle to get a mortgage for £136k.
    Might be worth speaking to a broker to see what you could get with another provider or failing that, choose a new rate with your current lender. They are not likely to do any affordability checks for a rate switch and you will save money not being on the variable. 
  • penners324
    penners324 Posts: 3,506 Forumite
    Sixth Anniversary 1,000 Posts Name Dropper
    Rate switch with your current lender
  • K_S
    K_S Posts: 6,875 Forumite
    1,000 Posts Fourth Anniversary Photogenic Name Dropper
    edited 14 September 2022 at 5:06PM
    @ceb1995 If you're with a mainstream lender then the most straightforward option to avoid falling on to the lender's SVR (Standard Variable Rate) is likely to be a product-switch / product-transfer/ rate-switch and stay with your current lender. This usually involves no income/affordability checks or underwriting.

    However, if you're with a specialist lender (Aldermore, Kensington, etc.) then it may be worth speaking to a broker to see what your remortgage (moving to a new lender) options are at this point in time.

    Very generally speaking, with a loan size of 136k, the fee-free option is likely to be cheaper overall but even if it isn't, you should be able to add any product fee to the mortgage.

    ceb1995 said:
    Our 5 year fixed expires in February 2023 and currently has a rate of 4.84% as at the time of buying our house we had a 95%LTV, since then our circumstances have changed and I am not working so our household income is about 6k less from when we took out our mortgage (DH works full time and I am a SAHP and student so pre benefits our income is about 26k and current mortgage balance is 136k approximately) however our houses value would be roughly 40k higher.

    So the question is do we stick to going onto variable until I start working again a year or so where we would have childcare costs then for 2 years or so we see if we can get any fixed deals on our lower household income, we d be happy sticking with our current provider but if we can find a way to get any product fees added onto the balance we d also consider that? 

    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.

  • ceb1995
    ceb1995 Posts: 388 Forumite
    Eighth Anniversary 100 Posts Name Dropper I've been Money Tipped!
    ceb1995 said:
    Our 5 year fixed expires in February 2023 and currently has a rate of 4.84% as at the time of buying our house we had a 95%LTV, since then our circumstances have changed and I am not working so our household income is about 6k less from when we took out our mortgage (DH works full time and I am a SAHP and student so pre benefits our income is about 26k and current mortgage balance is 136k approximately) however our houses value would be roughly 40k higher.

    So the question is do we stick to going onto variable until I start working again a year or so where we would have childcare costs then for 2 years or so we see if we can get any fixed deals on our lower household income, we d be happy sticking with our current provider but if we can find a way to get any product fees added onto the balance we d also consider that? 
    Don't go onto variable, it's grossly expensive. From what you have said about your income, you could actually struggle to get a mortgage for £136k.
    Might be worth speaking to a broker to see what you could get with another provider or failing that, choose a new rate with your current lender. They are not likely to do any affordability checks for a rate switch and you will save money not being on the variable. 
    Thats where I felt unsure with variable as our interest rate for the 5 years certainly wouldn't have been considered low. If we don't experience affordability checks for rate checks then we d be quite happy to stay with the current provider to do that, unless broker fees aren't particularly high. 
  • ceb1995
    ceb1995 Posts: 388 Forumite
    Eighth Anniversary 100 Posts Name Dropper I've been Money Tipped!
    K_S said:
    @ceb1995 If you're with a mainstream lender then the most straightforward option to avoid falling on to the lender's SVR (Standard Variable Rate) is likely to be a product-switch / product-transfer/ rate-switch and stay with your current lender. This usually involves no income/affordability checks or underwriting.

    However, if you're with a specialist lender (Aldermore, Kensington, etc.) then it may be worth speaking to a broker to see what your remortgage (moving to a new lender) options are at this point in time.

    Very generally speaking, with a loan size of 136k, the fee-free option is likely to be cheaper overall but even if it isn't, you should be able to add any product fee to the mortgage.

    ceb1995 said:
    Our 5 year fixed expires in February 2023 and currently has a rate of 4.84% as at the time of buying our house we had a 95%LTV, since then our circumstances have changed and I am not working so our household income is about 6k less from when we took out our mortgage (DH works full time and I am a SAHP and student so pre benefits our income is about 26k and current mortgage balance is 136k approximately) however our houses value would be roughly 40k higher.

    So the question is do we stick to going onto variable until I start working again a year or so where we would have childcare costs then for 2 years or so we see if we can get any fixed deals on our lower household income, we d be happy sticking with our current provider but if we can find a way to get any product fees added onto the balance we d also consider that? 

    yes, we're with one of the high street banks so the straightforward option of staying with them seems the way to go.

    If we were to say that we wish to have the higher value of the house now taken into account to increase our equity, would that still avoid income and affordability checks (its seemingly could be worth 190k these days with recent sales nearby on our street that could back that up and our banks own database seems to estimate that when I checked last) ? 
  • K_S
    K_S Posts: 6,875 Forumite
    1,000 Posts Fourth Anniversary Photogenic Name Dropper
    @ceb1995 Yes, irrespective of whether the valuation of the house has gone up/down or stayed the same, and you aren't looking to increase your loan size or change the term, a product switch (current lender) should involve no income checks, credit checks, underwriting, etc.

    The estimated value will be automatically updated on the lender's system and the products that you're offered will be based on the new LTV - outstanding mortgage / current value of property.

    ceb1995 said:
    K_S said:
    @ceb1995 If you're with a mainstream lender then the most straightforward option to avoid falling on to the lender's SVR (Standard Variable Rate) is likely to be a product-switch / product-transfer/ rate-switch and stay with your current lender. This usually involves no income/affordability checks or underwriting.

    However, if you're with a specialist lender (Aldermore, Kensington, etc.) then it may be worth speaking to a broker to see what your remortgage (moving to a new lender) options are at this point in time.

    Very generally speaking, with a loan size of 136k, the fee-free option is likely to be cheaper overall but even if it isn't, you should be able to add any product fee to the mortgage.

    ceb1995 said:
    Our 5 year fixed expires in February 2023 and currently has a rate of 4.84% as at the time of buying our house we had a 95%LTV, since then our circumstances have changed and I am not working so our household income is about 6k less from when we took out our mortgage (DH works full time and I am a SAHP and student so pre benefits our income is about 26k and current mortgage balance is 136k approximately) however our houses value would be roughly 40k higher.

    So the question is do we stick to going onto variable until I start working again a year or so where we would have childcare costs then for 2 years or so we see if we can get any fixed deals on our lower household income, we d be happy sticking with our current provider but if we can find a way to get any product fees added onto the balance we d also consider that? 

    yes, we're with one of the high street banks so the straightforward option of staying with them seems the way to go.

    If we were to say that we wish to have the higher value of the house now taken into account to increase our equity, would that still avoid income and affordability checks (its seemingly could be worth 190k these days with recent sales nearby on our street that could back that up and our banks own database seems to estimate that when I checked last) ? 

    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.

  • ceb1995
    ceb1995 Posts: 388 Forumite
    Eighth Anniversary 100 Posts Name Dropper I've been Money Tipped!
    K_S said:
    @ceb1995 Yes, irrespective of whether the valuation of the house has gone up/down or stayed the same, and you aren't looking to increase your loan size or change the term, a product switch (current lender) should involve no income checks, credit checks, underwriting, etc.

    The estimated value will be automatically updated on the lender's system and the products that you're offered will be based on the new LTV - outstanding mortgage / current value of property.

    ceb1995 said:
    K_S said:
    @ceb1995 If you're with a mainstream lender then the most straightforward option to avoid falling on to the lender's SVR (Standard Variable Rate) is likely to be a product-switch / product-transfer/ rate-switch and stay with your current lender. This usually involves no income/affordability checks or underwriting.

    However, if you're with a specialist lender (Aldermore, Kensington, etc.) then it may be worth speaking to a broker to see what your remortgage (moving to a new lender) options are at this point in time.

    Very generally speaking, with a loan size of 136k, the fee-free option is likely to be cheaper overall but even if it isn't, you should be able to add any product fee to the mortgage.

    ceb1995 said:
    Our 5 year fixed expires in February 2023 and currently has a rate of 4.84% as at the time of buying our house we had a 95%LTV, since then our circumstances have changed and I am not working so our household income is about 6k less from when we took out our mortgage (DH works full time and I am a SAHP and student so pre benefits our income is about 26k and current mortgage balance is 136k approximately) however our houses value would be roughly 40k higher.

    So the question is do we stick to going onto variable until I start working again a year or so where we would have childcare costs then for 2 years or so we see if we can get any fixed deals on our lower household income, we d be happy sticking with our current provider but if we can find a way to get any product fees added onto the balance we d also consider that? 

    yes, we're with one of the high street banks so the straightforward option of staying with them seems the way to go.

    If we were to say that we wish to have the higher value of the house now taken into account to increase our equity, would that still avoid income and affordability checks (its seemingly could be worth 190k these days with recent sales nearby on our street that could back that up and our banks own database seems to estimate that when I checked last) ? 

    that's brilliant, hopefully takes it from 95 to 75 LTV which is a major change for us, thank you for your help. 
  • dimbo61
    dimbo61 Posts: 13,727 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    So check out your lenders website and look for new deals for existing customers. 
    See how early you can book a new deal. 
    Normally 3 months but check !
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