How long before mortgage fixed-rate expiry to sort out (reduce) credit card usage?

MeeMawTucker

I have a mortgage fixed-rate expiring in April 2027 (joint with my husband)

I have been making full use of credit cards for spending and BTs etc, and for some reason my full credit available is over my annual income (about 120%); not sure why they let me but it did get us over some massive expenses. Have been paying it back as needed, am nit paying any interest and recently reduced the actual credit usage from 94% of available, to 82%; currently have enough in the bank to get it down to 57%, and hopefully can get it quite a bit below that by 2027

My question is - how long in advance of my fixed rate ending do I need to really work on reducing the total debt; is there a “sweet spot” at which the credit checks need to be at a certain point, or any cut offs that will damage our chances at mortgage renewal? BTW my mortgage is with Lloyds, as is one of the cards; my credit score with them hovers in the “good” category but used to be excellent before I started with the credit cards

Would really appreciate any advice/thoughts/things to consider - sorry it’s so long!

Isthisforreal99

Those % mean nothing - what ia your actual balance owing?

And ignore the good/excellent

eskbanker

Sounds like some potentially fraught plate-spinning, but how many of the 0% deals expire before April 2027 and what will you do if you're unable to BT onto new 0% cards? Owing, say, 50% of your annual income looks very different if not at 0%….

MeeMawTucker

ok sorry - the Lloyds app deals in % so I thought that was relevant. The actual numbers are:

income £50k

Credit available £60k

Credit card debt £50.4k

Have in bank to pay off now £16.5k (and hopefully more if savings plan goes right) and paying off about £1k per month to cover minimum payments

Does that make more sense?!

MeeMawTucker

https://forums.moneysavingexpert.com/discussion/comment/81860582#Comment_81860582

Yes - there are a couple of BTs that expire before then, which would be covered by the £16k I have in the bank; I wasn’t planning to roll them over on to new deals (even if they were to be available) so the whole amount is decreasing (but probably not fast enough to avoid any impact on the mortgage renewal - hence trying to gauge key timescales!

Isthisforreal99

Remember Lloyds will offer you retention products wihout a credit check.

Isthisforreal99

The problem you will have if re-mortgaging elsewhere is they will treat 3-5% of your balance as minimum for affordability purposes.

born_again

Just do a rate switch with current lender. No checking of finances required.

MeeMawTucker

https://forums.moneysavingexpert.com/discussion/comment/81860610#Comment_81860610

is that with regard to the re-mortgage? Surely they will ask what debt we have? We don’t particularly want to move to another provider

Isthisforreal99

https://forums.moneysavingexpert.com/discussion/comment/81860632#Comment_81860632

They won't, you just transfer to the new rate. It won't be the best rate available on the market but should be competitive enough.

MeeMawTucker

Oh interesting, hence better to look at Lloyd’s offers then for renewing?

3 to 5% is way more than the minimum repayments at the moment as two of the cards are 1% minimum payment (Virgin & Barclaycard) but if that is a standard assumption then that’s not good