chocolate_o_brian

iTrader: (22)

I've been on a 5 year fixed rate mortgage with Halifax since March 2005 when I bought my house. The % rate at the time was 5.69 or something like that (haven't the letter to hand). Now I recieved a letter last month stating that when it finishes, my interest rate will just go to variable or whatever the non fixed option is, 3.5% if I remember correctly. It's gonna basically be £120+ cheaper each month.

Now I do know this could shoot up or whatnot, but I'm unsure as what to do about it. Should I look to move it for a better deal or stay put? My credit score is shot due to defaulting on other credit when I was unemployed about 18 months ago, so I daren't look to apply for stuff. This is something you may have guessed I don't have a deep knowledge of. I haven't been rolled over and butt fcuked, moreso just taken what seemed good to me.

Any help or suggestions welcome

Jamz3k

I'd suggest knowing a bit about your situation from reading/talking to you that you get another fixed rate. Least that way you know what your going to be paying out against what your earning in your apprenticeship.

Or could you be trusted to save the £120 surplus per month? Personally I know i couldnt! lol

cookstar

iTrader: (6)

I suggest speaking to halifax and ask for a deal with another fixed rate, if you stay with them this will avoid any fees you may/will incur if you swap lenders (if you can)

Failing that just overpay the amount saved so if you do fall on hard times again you will be able to underpay by the same amount later down the line. Hopefully this won't happen then you can start watching the years drop off your term.

chocolate_o_brian

iTrader: (22)

Well something I forgot to mention is that I am currently paying off some arranged arrears I incurred a few months last year. I basically pay £50 on top of my mortgage to pay off said arrears as thats all I can afford. So I could look at paying more back to get rid of them quicker, but my understanding is you can't change your deal or rate when in arrears, authorised or unauthorised. Should have mentioned that before.

I like having a fixed rate, but if the variable is 3.5%, would the general rule of the fixed be a little higher so as to take into account adjustments?

I'd also like to restructure the mortgage in the next 2 years or so (when I'm on at least min wage again) to reduce the term. It's got 35 years left and I want rid of 10 of the buggers

Thanks for the advice so far.

cookstar

iTrader: (6)

How many months would it take to repay the arrears @ £130 or so a month?

stevebt

iTrader: (8)

I spoke to halifax about a remortgage on a similar fixed rate to what I'm on now and the payments would be £50 a month more than what I pay now, so I'm just going to take my chance on the variable rate. When I asked the girl in the bank why I had to pay more for a mortgage when interest rates are as low and she replied " we have a lot of debts to repay"

jonc

I would say stick with the variable, the base rate is 0.5% and is likely to stay that way for some time possibly to the end of this year and use the £120 to make overpayments on your mortgage which will make a massive difference if you want to reduce your term. You won't get a better return by sticking it in a savings account and the 3.5% is free of tax unlike the interest on a savings account.

If you move mortgages, then there will be application/reservation/admin fees and possibly legal fees to pay especially if you move providers. Also interest rates on fixed mortgages are pretty high at the moment.

IMO of course.

Jay m A

iTrader: (2)

Have you looked into what deals are on offer? At a guess i'd say you wouldn't get any deals that are better than the SVR you will drop in on. So why bother change? Assuming the halifax doesn't go ballistic with their SVR and keep it at a fixed amount above base then for the next few years this will be the best option, unless you have mega equity.

jods

A LOT of sense is therein spoken!!

I'm overpaying my mortgage by £100 a month and it has cut 6 years off the term length!! 6 SIX that's VI Years!!!!

PaulC72

COB, If you only have arrears to pay on your mortgage it would be best spent clearing those up, if you have anything on CC or alike maybe a though should be given to tackling them also?

At the end of the day any reduction in debt has to be a good thing beit arrear or mortgage balance, loans and so on.

I am not too sure that places like Halifax will give a good fixed rate out even though the SVR is so low, but if you do stay on the 3.5% SVR would you be ever worse off should the SVR go up later in the year taking the possible fixed deals from say 6% to 8%?
Ok 3.5% would require 4 or 5 BOE increases at .5% each time to reach where you are just coming off but come mid next year it could easily be back there (or not no one knows...)

FWIW thats my thought.

madscoob

iTrader: (3)

stay on the halifax svr . i asked a while ago i want 40g to do a loft conversion and they said no prob as i have no morgage at all on a 250g bungalow. all said and done the svr was 3.5 the same but they will allow you to overpay by 500pound a month . a 40g morgage was 214.00pound a month over 25 years so i am just gonna pay double and pay off early with no early redemtion fees at all . so stay with them overpay and after 2-3 base rate increases think about a 5year deal if nessasary. thats my advice for what its worth . ive had 2 morgages both payed off early by doing this . then when you are 43 like me sit back and enjoy being better off

john banks

I would be looking at how much more than the present variable rate would put me into further arrears, and then decide whether I would rather risk this or fix to have some certainty. With the lowest interest rates for over 300 years (probably longer?), is an SVR likely to get cheaper in time especially if fixed rates are presently expensive? Are the fixed rates expensive for a reason? Is a year or two of saving a few bob a month worth the risk of arrears in future? Decisions, depends on your exit strategies for each possible outcome and your attitude to risk.

chocolate_o_brian

iTrader: (22)

About a year I think. I went a few months at only paying about £150, then a few paying £250 so arrears were well into 4 figures

Jamescsti

I'm in a similar position, got a property on a 100% mortgage 2 years ago, come to end of deal on a 2 year fixed rate and now saving a whopping £300 a month on repayments on the standard variable rate, mine is slightly lower at around 2.5% though with C&G. personally i'm using the saving to pay off other debts faster on higher rates, that way if the rate goes back up I can just move around again where the money is going so to speak.

Downside is although i am not in negative equity, i doubt I have enough positive equity to get a decent fixed rate at the moment

stilover

It looks like 0.5% base rate will be with us for the near future. Would guess any rate change will happen after the election, which based on saving £120 a month for say 5 months = £600 to either put away or use to pay your arrears off.

You can always jump to a fixed rate once rates start to rise again.

Speaking to an independant mortgage adviser woulv be your best option. Speak to the Halifax by all means, but remember the halifax will only offer you products they offer, and not what might actually be cheaper for you elsewhere.

Good luck.

chocolate_o_brian

iTrader: (22)

Seems the general consesous here it to repay back the arrears more quickly and stay on the variable rate. I may make an appointment to see the Halifax mortgage advisor and see what they have to say. They can at least tell me what I am limited to by being in arrears.

To make it clear, the arrears were arranged and not just fallen into. Considering I was very skint the same time many people are/were in the recession, Halifax did quite a lot to help me. They could have been ***** and threatened me with court etc., but with the help from the C.A.B. and properly written letters/logged phonecalls, everything was above board. So I'm thinking to try put at least another £50 a month onto the arrears as without going into specific details, any money saved will be sucked up into other things which need fixing (like my recent moanings about loft/wall insulation).

Kinda robbing Pete to pay Paul in old money

Thanks for the advice

chocolate_o_brian

iTrader: (22)

Understand what you're saying definitely. My reasoning for speaking to Halifax first is to see what restrictions I have with regards being in arrears. Again I don't know but I'm assuming if I saw an independant, how would they charge? Knowing I can pop to Halifax and speak for free helps, as I've never used an independant before.

john banks

With the cost and availability of deals once this happens, it will likely be a bad time to do it?

I would be wary of making decisions on loan financing based on negative real interest rates that are presently being subsidised by savers and future inflation... it could be worse than what they were originally trying to prevent as they have no more buttons to press to bail out borrowers.

PaulC72

COB you don't owe me anything


By that are you saying when things start to go up the current fixed deals will probably disapear and become more expensive?

njkmrs

COB .It should cost you nothing to speak to an Independant Financial Adviser .They wil have a range of different lenders ,mortgages etc which they can show you and if you go with one of their recomendations ,that is where the Adviser gets his/her cut from .They will show you what they get out of it as I think it has to be declared to the person taking their advice .They often have specialist lenders for less than straight forward cases etc which high street lenders dont usually accomodate .

I have done it this way several times .

Good Luck .

chocolate_o_brian

iTrader: (22)

Thanks for that, a nice insight there. My worry being that as I have arrears (which are, as previously stated arranged), that the decent deals would be out of my reach and I would have to taken what I could.

I'll look into it when I've spoken to Halifax.