Another mortgage advice thread (please!)

[tw_uk]

Trying to be a bit forward thinking here folks and welcome your thoughts!

Ball-park details...

- 2 year fixed rate mortgage runs out end of September this year (was fixed @ 6.7%).
- 1st time buy to get onto ladder.
- Brought with a mate (tennants in common) - neither of us are in a rush to move but, ultimatley will want to move out with girlfriends in time/years to come.

- It was a 100% mortgage product for £190k.
- Interest only.
- Fixed repayments @ £1000 PCM. *Edit* - With incomes in mind this is well 'affordable'.
- Negative equity situation with house price now of around £165k.
- After Sept we revert to the Standard Varable rate, currently at 3.5%.

Spoken to the lender who was unhelpful to say the least! The 'advisor' over the phone in our 5 min conversation basically said we are not eligable to switch to a repayment because of the LTV % and said "just carrying on paying the morgage thats all you can do".

Assuming current figures!

- Come September out mortgage payments will near half?
- We are happy to stay put (no problems with property - still love it)

Any advice as to how to put ourselves in best position in circumstances?
- repayment?
- Save?
- etc.. etc..!

Any suggestions, advice, thoughts welcome. Cheers!

Edited by tw_uk on Tuesday 27th January 20:08

[GreenV8S]

Given the negative equity situation and the fact that the current payments are well within your budget I suggest you save like mad and try to claw your way back into positive equity. As it stands, moving will be impossible and you will be locked out of the majority of mortgage offers. If you're prepared to wait it out and don't mind waiting a decade or so that might not be such an issue (assuming you are confident about staying employed), but given your plans to move (and presumably sell) in the forseeable future I would view the negative equity as your main problem.

[tw_uk]

Thanks for that, its good to have an outside view.

My job is as secure as one can be (luckly)! Steady increase in disposable income too so its likley to be save, save, save!

Edit* - Any advice on the Standard Variable Rate? - Likley to remain low for the forseeable?

Edited by tw_uk on Tuesday 27th January 21:36

[GreenV8S]

I'm not a mortgage broker and have no specialist knowledge, but if you can get 3.5% with your [lack of] equity I would say you've done extremely well. As I see it the interest rates can barely go down any further, but there is huge scope for them to go up. So if I had the option I've be looking to fix those rates rather than stay on a tracker.