Revaluations and mortgage conditions

[Mekon]

Our mortgage is only available up to 60% of the valuation. I presume someone on here knows what triggers a revaluation, as I've seen people say they do revaluations (search not playing ball tonight). I am hoping to avoid getting kicked off the deal we have, and am trying to figure out whether it's worth overpaying to ensure it won't happen.

Thanks

[scotal]

Mekon said:

Our mortgage is only available up to 60% of the valuation. I presume someone on here knows what triggers a revaluation, as I've seen people say they do revaluations (search not playing ball tonight). I am hoping to avoid getting kicked off the deal we have, and am trying to figure out whether it's worth overpaying to ensure it won't happen.

Thanks

I would guess that unless you have a problem paying the mortgage, the bank will leave you alone until such time as you come to remortgage. Revals are usually reserved for the commercial property sector, not resi.

Are you on a tracker rate? If so you might want to use the rate cut today to at least fund something of an overpayment.

[Mekon]

Yeah, on a +.17% lifetime tracker. If I am not likely to be forced it to it, I have to work out if putting cash into the mortgage makes more sense than in savings accounts (not ISAs). I assume what I need to work out is savings interest rate minus tax versus mortgage interest rate, and work out whether I value the flexibility that accessible savings offers versus the long term benefits of early repayment, whilst at the same time noting I probably won't be able to find the mortgage money that cheap again for a while, and therefore having that money so cheaply might mean paying it back is silly if we think were going to need more funds for a bigger place any time soon.

Do those seem like the right questions? I can see why people have IFAs.

[GreenV8S]

As far as I can see it, you're financially better off paying off the mortgage. Your savings are most unlikely to attract enough interest to offset the mortgage interest. Previously, with property prices rising this worked a bit like an offset mortgage - the mortgage company would usually let you overpay and then draw back the excess if necessary by taking a payment holiday. This option relies on you having equity. As the equity falls you lose the ability to withdraw the overpayments. That means that if you have any unexpected problems that disrupt your income, you can't use your overpayments to keep paying your mortgage and keep you out of trouble. If you had kept the cash out of the mortgage, it's available for you to keep up your mortgage payments.