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Mortgage Renewal... when to start?

My 5 year deal expires in March 12 but I'm already thinking about the new deal,provider etc.

Ive been overpaying like buggery since the word go; does that put me in a position of strength or not really make any difference?

Also is now too soon to start asking and looking around or do I need to wait until this term expires?

Thanks rooster.

My annual mortgage statement is due next month and going by last years I should be miles ahead. Even if I ended up with a new deal on the same % interest as previous (5.99) then my payments should more than half I reckon. Obviously interest rates are way down since then so its looking good for me in real terms. Especially regarding pay-freezes and any other nasty surprises.

I still intend to overpay but its nice to know Ive got that buffer-zone should I need to cut back.
Your thread is really helpful, I've been looking for some answers concerning loans. Lately I have been thinking to have my own house but I'm afraid to make some wrong decisions after reading some articles about A record number of mortgages are underwater, as house values have plummeted and left millions paying more for a house than the homes are worth. Real estate is suffering from low value and also lower demand, as more homes are being foreclosed on, joblessness is still high, and credit restrictions are tighter than ever. The next year could see house values drop even further.

SPAM for a SEPTIC site

I would start looking sooner rather than later unless you want to transfer to the variable rate. Unfortunately you may have missed out on the low fixed rates as there was a large fixed rate withdrawal last week in the UK, so your best bet may now be a tracker rate.

The higher your equity the lower the rate that will be available, but typically you should always look at remortgaging t around 2 months in advance of your product end date so that you give yourself ample time to get the deal done.

What is the value of property and how much do you owe?
Cheers Mike. Valued at 93k, last year's mortgage statement was 75k I think. Due this years statement next month.


Book Reviewer
You've got two strategies:

1) Fix for another 5 years
2) Get Standard Variable Rate mortgage

Fixed rate will be above SVR rate because mortgage providers will be pricing in the expected base rate increase from 0.5% to 1.25% by the end of the year.

The gamble you can take is if you take a SVR mortgage, the average SVR rate for the next 5 years will be below the fixed rate you can get for that time period.

Where will base rate be in 2 - 3 years? Depends on how rapidly the economy recovers from the one eyed idiot and how hawkish the Bank of England is on inflation....

Cheers Mike. Valued at 93k, last year's mortgage statement was 75k I think. Due this years statement next month.

Based on you current loan to value of 80%, you have the following options. Firstly check your current lenders standard variable rate as this is what you are going to revert to in March.

In terms of 2 year trackers there is an option at 3.68% with no fees and £300 cash back. This is a good option if you decide that you merely want to pay less than the SVR but aren't happy with the fixed rates on the market.

4.99% 2 year fixed no fees, but no cash back. Do you expect the base rate to rise by 1.5% in the next 2 years, as this is how much it would need to go up by for the fixed rate to be better than the tracker. There is no point looking at 5 year fixes as the pay rates are too high at 80%.

You have to bear in mind that in 2 years time the base rate will be higher, however it would be nice to think that you would have accrued value in 2 years, coupled with your overpayments, may enable you to remortgage at sub 75% and open up the market (although pay rates could still be higher than today).

Hope this helps . . .
Thanks for all the advice. Will be addressing this when I'm next back home (April probably) so will keep you posted on how my initial chat went.

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