Head is up my bum, need help from you MSE's

meliat

Right,

I currently have a mortgage with northern rock, I am on a fixed rate of 6.99 which I only signed last September, now I owe 137,000 on my mortgage, this included additional borrowing secured against the house, the house itself is only worth around 140,000 at the very most.

Halifax have informed me that they have fixed rate of 3.99 for 2 years which by going on a mortgage calculator would save me over £250 p/m, but if I was to leave Northern rock and go with them, I will have to pay £6000 early repayment charges to NR, so an unsecured loan is needed to pay for this, plus other debts accrued so in total, an additional £25,000.

If we got this loan over the length of the mortgage, I.e 25 years, we would save in excess of £600 p/m on what we pay now, (this amount would reduce over the next 4 years as they are loans with other lenders), but financially we would be better off.

I have an apptointment on Saturday and to save wasting my time, do you think this can be done, and if so, worth it?, as I explained this to a friend and he does not see the benefits of getting into more debt, i.e 6g payment to NR.

Any help would be appreciated

:money:

herbiesjp

Is Halifax really trying to advise you to do this?

Rick62

`Where have you found a fixed rate at 3.99%? Halifax do have a 3 year stepped rate, which starts at 3.99% but then is higher in years 2 and 3.

Also if you have a £137k mortgage vs a house of £140k it will be hard to remortgage anyway.

jedimonkey

Sound like you are mortgaged to the hilt, then would be adding more by way of redemption penalty (new 6k loan), fees for new mortgage etc

How long is your NR deal still got to run??
if I was you... i would accept that my current deal wasnt the best.... and i would try to pay off as much as possible until the end of current deal then switch to a better deal if possible. penalty free.... concentrate on paying off.... not adding on

i think taking on extra debt to get move debt is pointless...... if you take you 6k over the time of your mortgage (25yr) at a unsecured loan rate of 7.9% you would pay back £13,773.66 - dont sound so good now eh??

I think you need to work out the total repayable figures etc involved before making your decision.

I hope this ramble has made sense.

silvercar

a 3.99% two year fix must come with charges, what are they?

Gonzo

You sound in a bit of a pickle here. It sounds like you keep paying out new loans to pay off old ones then running debts up again (from the information given; forgive me if I have the wrong end of the stick). I did pretty much the same in the past and it's a never ending cycle until you sort out the root cause; your spending habits. I would put all your efforts into paying off your most expensive debts -all the help needed can be found on these forums. It definitely changed my life, and after 5 hard years of repayments I can breathe a sigh of relief now and start building savings for the future. That may not be the case of course, but if it is, I would be retiscent to add to my debts and start paying lots of redemption penalties etc

Emmalou

I went into the Halifax yesterday who asked me about my mortgage and said they had a 3 year fixed rate at 3.99%, plunging me into depression as I've just recently completed on a remortgage at 5 year fixed rate of 5.39%.
She also said the fees were only in the region of £100 - £200 (I paid fees of £999). More depression.
So, it is not a genuine 3 year fix. Just looked on their website and it is a stepped fix being 5.99 in years 2 and 3. Or is there another one they are bringing out?
£6000 early repayment charges to NR sounds awfully high - do your maths, but it would have to be a truly fantastic deal surely?

UK007BullDog

The rate is probably a stepped rate which means it will be a lot higher in year 2 and 3. And I mean a lot. Went on their website and cannot find a deal like that.

But yes, try to pay of your debts not add on to it and you are probably already in negative equity so would need a 100% mortgage which means with some lenders a Higher Lending Charge on top of your other charges.

Dont try to move, try to pay off the debts as quickly as possible and then when you are free to move look elsewhere.

UK007BullDog

Can you post the link please. thanks

robnye

Stay............ sometimes these sorts of deals come along just as you have signed on the dotted line..... thats life im afraid......... leave it a year then reassess

Rick62

The deal is not clear, on the website I could find it described as a 3 years stepped fix at 3.99% without giving the rates in year 2 and 3. Very misleading in my view.