Fixed term mortgage ends in 6 months.. What's the best plan?
Discussion
Do I need to even start thinking about this yet? Our fixed-term will end in 6 months' time, so wondering what, if anything, I should be doing now; and also what considerations I should make for the 'best' move (recognising there may not be one).
Our situation is as follows, and I'd welcome your comments/advice...
To build a bigger picture, my partner is on a low wage in a secure job. I'm on a good wage, but in a less secure job, with my current project coming to an end in July 2013; after which if I don't get another job, I'll get a redundancy payment to cover 4 months.
It is extremely likely we'll want to move very shortly to a bigger house, though have no firm plans yet for this.
So, I'll open it up to the floor... Anyone got any advice? If I've missed anything, please let me know!
Our situation is as follows, and I'd welcome your comments/advice...
- We bought the house for £143,000. It's currently worth (I'd guess) around £130,000.
- We bought the house in October 2007, as first time buyers, on a 5 year fixed-term rate of 5.99% (Ouch, I know...)
- We currently owe (according to Halifax online banking) around £93,000, but we have another £30,000 waiting to go in (hit our overpayment limit).
To build a bigger picture, my partner is on a low wage in a secure job. I'm on a good wage, but in a less secure job, with my current project coming to an end in July 2013; after which if I don't get another job, I'll get a redundancy payment to cover 4 months.
It is extremely likely we'll want to move very shortly to a bigger house, though have no firm plans yet for this.
So, I'll open it up to the floor... Anyone got any advice? If I've missed anything, please let me know!
Talk to everyone. Brokers, banks, building societies. As you say, the good LTV you've got puts you in a really good position. If I were you one of the principal things I'd be looking for is either an offsetting mortgage or the ability to overpay massively - I guess given the amount you've got saved you can afford quite a bit more than the monthly payments at times?
davepoth said:
Talk to everyone. Brokers, banks, building societies. As you say, the good LTV you've got puts you in a really good position. If I were you one of the principal things I'd be looking for is either an offsetting mortgage or the ability to overpay massively - I guess given the amount you've got saved you can afford quite a bit more than the monthly payments at times?
I guess we best get a move on then and start talking to people! Where's the best place to start?Actually the money came partly from not owning any cars any more. We're currently leasing a car through my partner's work. We do still have money left over each month though, and we've saved around £30,000 over the last few years. We only started really saving when my job became less secure.
I think we can probably afford around £1300-1400 each month to go towards a mortgage, and we currently pay £830.
Pulse said:
davepoth said:
Talk to everyone. Brokers, banks, building societies. As you say, the good LTV you've got puts you in a really good position. If I were you one of the principal things I'd be looking for is either an offsetting mortgage or the ability to overpay massively - I guess given the amount you've got saved you can afford quite a bit more than the monthly payments at times?
I guess we best get a move on then and start talking to people! Where's the best place to start?Actually the money came partly from not owning any cars any more. We're currently leasing a car through my partner's work. We do still have money left over each month though, and we've saved around £30,000 over the last few years. We only started really saving when my job became less secure.
I think we can probably afford around £1300-1400 each month to go towards a mortgage, and we currently pay £830.
I guess the best place to start with is your current provider - they may want to keep your business since you sound like a pretty good customer, and it'll take a lot of hassle out of changing over. Other than that I guess start with the comparison sites to get an idea of what's available, and go from there. If you can get a recommendation for a local IFA from a friend that would probably be well worth it too.
Halifax sent letter this week saying their svr is going from 3.5 to 3.99 on first of may. Maybe the tide is about to turn on interest rates.
Once your out of the fixed period (overpayments limited lite you said) and into the svr you could make that 30k overpayment but you can always take back overpayments if work dried up for bit next year?
Once your out of the fixed period (overpayments limited lite you said) and into the svr you could make that 30k overpayment but you can always take back overpayments if work dried up for bit next year?
The final £60-65k figure is including the money we have waiting to go in unfortunately, so still a big risk staying on the SVR.
Can I safely assume however that going onto the SVR would mean no 'arrangement' fees and suchlike? In which case, we could be quids in, in the short term.
We could get a 2 year fix @ 2.54%, but that has an arrangement fee of £1999.
Can I safely assume however that going onto the SVR would mean no 'arrangement' fees and suchlike? In which case, we could be quids in, in the short term.
We could get a 2 year fix @ 2.54%, but that has an arrangement fee of £1999.
Pulse said:
The final £60-65k figure is including the money we have waiting to go in unfortunately, so still a big risk staying on the SVR.
Can I safely assume however that going onto the SVR would mean no 'arrangement' fees and suchlike? In which case, we could be quids in, in the short term.
We could get a 2 year fix @ 2.54%, but that has an arrangement fee of £1999.
There will be no fee's in moving on to the SVR.Can I safely assume however that going onto the SVR would mean no 'arrangement' fees and suchlike? In which case, we could be quids in, in the short term.
We could get a 2 year fix @ 2.54%, but that has an arrangement fee of £1999.
Even at 3.99%, it's still relatively low in comparison to other lenders SVR's.
We're in same situation re equity as you, we went onto nationwide svr @ 2% and we're able to overpay upto £500 every month.
We used to be on a fixed @ 6% so we no we could handle any increase so will probably stay with the svr.
Re your 2 year fix, with such a low mortgage there's no point having the arrangement fee's , look for one fee free, i think if i was going to get a fix i'd want it longer so it 5-10 years so it would last the duration of the mortgage but i'd only do that if rates started rising dramatically.
We used to be on a fixed @ 6% so we no we could handle any increase so will probably stay with the svr.
Re your 2 year fix, with such a low mortgage there's no point having the arrangement fee's , look for one fee free, i think if i was going to get a fix i'd want it longer so it 5-10 years so it would last the duration of the mortgage but i'd only do that if rates started rising dramatically.
Edited by egor110 on Saturday 31st March 20:42
We have just got HSBC variable at Bank of England base rate + 2.09% = 2.59%. No fees and unlimited overpayments any time.
We've moved from another lender. I reckon the checks and remortgage process has taken about 2 months from initially speaking to HSBC.
Couldn't find a better deal out there at the minute. Six months till the end of your fixed rate might be a bit too long for you to start switching now.
We've moved from another lender. I reckon the checks and remortgage process has taken about 2 months from initially speaking to HSBC.
Couldn't find a better deal out there at the minute. Six months till the end of your fixed rate might be a bit too long for you to start switching now.
Keep checking the best buy sites on a weekly basis so you will know the Market pretty well and also what products are most suitable for you.
In 5 yours you have paid off half your mortgage assuming you could continue at that level by 2017 or sooner you could be mortgage free (in the same property).
You have as you say a job that isn't secure post summer next year but would get redundancy which would last your until the end of 2013 so far you are paying off £13k per year on average so if you stay where you are up until the end of next year your mortgage would have an outstanding balance of £40k.
Even on a low salary £40k is a debt which is quite affordable if the worst did happen. If you are out of work who knows for how long and you have upgraded to a bigger house with a much bigger mortgage.... Worst case you could lose that house and a notable amount of your deposit as they fire sell it as a repossession. May never happen but it could.
In 5 yours you have paid off half your mortgage assuming you could continue at that level by 2017 or sooner you could be mortgage free (in the same property).
You have as you say a job that isn't secure post summer next year but would get redundancy which would last your until the end of 2013 so far you are paying off £13k per year on average so if you stay where you are up until the end of next year your mortgage would have an outstanding balance of £40k.
Even on a low salary £40k is a debt which is quite affordable if the worst did happen. If you are out of work who knows for how long and you have upgraded to a bigger house with a much bigger mortgage.... Worst case you could lose that house and a notable amount of your deposit as they fire sell it as a repossession. May never happen but it could.
I know you're local to me in the South West, so I'll pass on the details of the IFA that I've used to sort all my mortgages and financial stuff...
Being self employed in a war zone, then an employee in other foreign climes has meant that nothing is easy and it's no exageration to say that without this guy I wouldn't have the house I'm in now... he really went above and beyond.
Give John Moore at Carter Moore a call on 07776 303050 or drop me a PM for his e-mail address... tell him I sent you!
Being self employed in a war zone, then an employee in other foreign climes has meant that nothing is easy and it's no exageration to say that without this guy I wouldn't have the house I'm in now... he really went above and beyond.
Give John Moore at Carter Moore a call on 07776 303050 or drop me a PM for his e-mail address... tell him I sent you!
Welshbeef said:
Keep checking the best buy sites on a weekly basis so you will know the Market pretty well and also what products are most suitable for you.
In 5 yours you have paid off half your mortgage assuming you could continue at that level by 2017 or sooner you could be mortgage free (in the same property).
You have as you say a job that isn't secure post summer next year but would get redundancy which would last your until the end of 2013 so far you are paying off £13k per year on average so if you stay where you are up until the end of next year your mortgage would have an outstanding balance of £40k.
Even on a low salary £40k is a debt which is quite affordable if the worst did happen. If you are out of work who knows for how long and you have upgraded to a bigger house with a much bigger mortgage.... Worst case you could lose that house and a notable amount of your deposit as they fire sell it as a repossession. May never happen but it could.
That's basically what I've been thinking; staying in the house we're in for another couple of years, just because it's very low risk then. Trouble is, you can't spend your life so risk averse, and we'll need to take the plunge at some point.In 5 yours you have paid off half your mortgage assuming you could continue at that level by 2017 or sooner you could be mortgage free (in the same property).
You have as you say a job that isn't secure post summer next year but would get redundancy which would last your until the end of 2013 so far you are paying off £13k per year on average so if you stay where you are up until the end of next year your mortgage would have an outstanding balance of £40k.
Even on a low salary £40k is a debt which is quite affordable if the worst did happen. If you are out of work who knows for how long and you have upgraded to a bigger house with a much bigger mortgage.... Worst case you could lose that house and a notable amount of your deposit as they fire sell it as a repossession. May never happen but it could.
What I've realised is that no job is ever really 'secure', so whilst my contract does come to an end next year, there's nothing to say I won't walk into another job... Of course it could go the other way, but I suppose you're forever taking that risk.
I'll keep looking at the market for now... I think I'm leaning towards staying on Halifax's SVR when the term ends.
K50 DEL said:
I know you're local to me in the South West, so I'll pass on the details of the IFA that I've used to sort all my mortgages and financial stuff...
Being self employed in a war zone, then an employee in other foreign climes has meant that nothing is easy and it's no exageration to say that without this guy I wouldn't have the house I'm in now... he really went above and beyond.
Give John Moore at Carter Moore a call on 07776 303050 or drop me a PM for his e-mail address... tell him I sent you!
Cheers Del. I'll PM you and drop him a mail.Being self employed in a war zone, then an employee in other foreign climes has meant that nothing is easy and it's no exageration to say that without this guy I wouldn't have the house I'm in now... he really went above and beyond.
Give John Moore at Carter Moore a call on 07776 303050 or drop me a PM for his e-mail address... tell him I sent you!
Pulse said:
That's basically what I've been thinking; staying in the house we're in for another couple of years, just because it's very low risk then. Trouble is, you can't spend your life so risk averse, and we'll need to take the plunge at some point.
What I've realised is that no job is ever really 'secure', so whilst my contract does come to an end next year, there's nothing to say I won't walk into another job... Of course it could go the other way, but I suppose you're forever taking that risk.
I'll keep looking at the market for now... I think I'm leaning towards staying on Halifax's SVR when the term ends.
The beauty of being in that situation is you quickly become mortgage free and then build up savings thus requiring a lesser future mortgage. What I've realised is that no job is ever really 'secure', so whilst my contract does come to an end next year, there's nothing to say I won't walk into another job... Of course it could go the other way, but I suppose you're forever taking that risk.
I'll keep looking at the market for now... I think I'm leaning towards staying on Halifax's SVR when the term ends.
Of course buy at the right time you could make £100k in a few years in rising value.
I've been so lucky in my current place bought it as a distressed sale so we got it well well under Market value and it is now certainly worth £100k more at the very least. Had we waited three years would we have saved £30k extra per year... Um unlikely.
egor110 said:
What's wrong with house your in now?
If you need to move for work or somewhere bigger due to kids fair enough, but if there isn't a good reason, stay put and pay off the mortgage asap.
Well, we all want some nice things in our life I guess... We've outgrown our (very) small 2 bed, even though it's only the two of us. We don't splash out on anything really, but a nicer house is something we both really want.If you need to move for work or somewhere bigger due to kids fair enough, but if there isn't a good reason, stay put and pay off the mortgage asap.
I can see the most sensible option being staying where we are for 2 years, but the likelihood is we'll move within that time.
Pulse said:
Well, we all want some nice things in our life I guess... We've outgrown our (very) small 2 bed, even though it's only the two of us. We don't splash out on anything really, but a nicer house is something we both really want.
I can see the most sensible option being staying where we are for 2 years, but the likelihood is we'll move within that time.
How about upgrade and keep 10k of that 30k back incase work goes kapoot and you have a bigger mortgage. Or perhaps yours mrs's small wage can cover it or you will have insurance?I can see the most sensible option being staying where we are for 2 years, but the likelihood is we'll move within that time.
Gassing Station | Finance | Top of Page | What's New | My Stuff