renewing fixed rate morgage

julieanne13

hi :-) i was just wondering if anyone could help me. my fixed rate morgage is finishing on june the first, we paid £400 too fix it at 4.99% 2 years ago. i cannot work now so money is getting tighter and tighter. i have just ranf C&G and they offered 6.24% costing £495 or 7.04% with no fee or 6.54% for 5 year £495.
i am now worried sick as i know our morgage is going to go up masivly and we are strugling already?
should i take one of these opptions and add the £495 to the morgage like we did last time? if so which one?
thanks julie

sarkin

If you can not prove income sufficient for the mortgage, then you will have to stay with your lender. Or sell up and bank your profit.

beecher

Have a look here
http://www.moneymadeclear.fsa.gov.uk/tools.aspx?Tool=mortgage_calculator

to work out how much your payments will be.

I'd find out what the Early Repayment Charge is - if you find yourself unable to cope with the repayments, selling might be an option and you don't want to be stung with a huge payment.

julieanne13

we owe less than £40k! surley i dont have to sell?

begbeer

Why not try and extend your mortgage so the repayments would be less and then if and when things get better moneywise pay off some of the capital

beecher

julieanne13 wrote: »

we owe less than £40k! surley i dont have to sell?

Your original post made it sound like you were really struggling with the payments at 4.99%. 6.24% shouldn't make that big a difference to the payments - maybe only £30/month depending on how long you have to go. The problem with the media is that they focus on the 'average' mortgage, which is far bigger than yours!

cooper2110

Based on that level of mortgage, I don't think the repayments would be hugely different with the interest rate hike, I would also say that paying a fee would not be worthwhile.

Do you have actual monetary figures rather than rates as to what it would cost you per month?

julieanne13

we owe just under 40k due to us being total ideots we messed up the morgage - it was endowmment we thought we had gone to repayment - we never looked just signed and we hadent :-( so we set it up again. it now is repayment but we still have 14 years to go. we were both on low income but have never missed a payment. now i cannot work and we are worried as all ours bills are going up but our income has halved.
we pay £233 per month
we just have not got £500 to re set the morgage but i am scared to death of the out come if we dont.
this is just hell on earth

Gorgeous_George

I make it that, assuming the first two options are 2 year deals, the 6.54% is better (and it's a 5-year deal and I like the longer term deals). If they are three year deals, the 6.24% is marginally cheaper. If you are confident that your LTV will be attractive at the end of your fixed term the only other variable is interest rate movements. If you think that a better deal will be available in 2 or 3 years then the shorter fix might be ok.

You could take the opportunity to extend the mortage term or go interest only. This will reduce your payments but, of course, the mortgage would be hanging around your neck for longer and you'd need a repayment vehicle if you chose interest only. This could be an inheritance perhaps?

GG

beecher

I can't work out how much extra you'll be paying, as when I put into the mortgage calculator £40,000 at 4.99% over 16 years it comes out at £302/month rather than £233 so something somewhere isn't right regarding the numbers.

Maybe you should get C&G to tell you how much your repayments would be under each of the 3 options and work out which would be cheaper, or post here what they say and someone can work it out for you.

Don't panic at this stage though - you've got a small mortgage compared to others and extending the term is an option.

julieanne13

you are right - i am panicing. when we first bought in 1986 we took c&G advice and had an endownment morgage. in 1989 we moved and asked the soliciter to make our morgage into a re payment. 10 years later we tried to re norgage and only then found out we were still on endownment. we spoke to C&G and they adviced to keep payment low we should extend so basically we lost 12 years of payments. i totally know we are stupid in every turn we take!! i dont need to be told by any ne - i kick my self more than enough :-(

all i want is a fixed rate that is not going to need us to pay out hugh sums of money to set up

clever people on here will be laughing thei heads off at how stupid i am - and i dont blame them - but being stupid should not mean i have to keep paying dose it?

thanks julie
p.s i will ring the bank to morrow and find out exactly how much i owe and how long i have left to pay