Quick mortgage question

No1newts

No1newts

No1newts

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Joined
24 May 2009
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If you are on a rate when you start the mortgage, lets say 4%, after X amount of years on the fixed rate you switch to the SVR.

From that point how can you go about changing your mortgage then? So if the repayments are too high once you are a customer with a bank can you switch products or do you need to stump up money to switch etc?

Not too sure, mortgages aren't my strong point :p
 
You buy a new product, this pays off the old product, some will have arrangement fees, which you should factor into the cost, some will not have arrangement fees, but might have less attractive rates.
You shouldn't be hit with early repayment costs as you are out of your special term reduction rates, but check you own agreement.

See an IFA for some basic advice, bring your old policy and agreement with you.
Might even be with talking to your own bank directly for starters, see if they have an offers directly.
 
You can do what you want, whenever you want - its just that the penaltied for changing product/moving mortgage elsewhere are usually high during the fixed period,

Most come with a product fee now or an alternative with a higher rate that usually ends up significantly more expensive than just taking the hit up front so don't be fooled by "no fees"
 
So after a fixed period you can "generally" switch to a new product.

But if you switch to something with lower rates you will generally have some form of fee for moving to a new product.

Am I right? :p
 
It depends on the product and on whether or not you're switching to a new lender (they are likely to require a valuation - 3rd gear drive by kind)

Once your current loan is free of any overhangs (early repayment / exit penalties) you can switch to whoever you like.

A word to the wise - pay more attention when you take out your next loan. You're responsible for it, even if secured on your property.
 
I'm asking the question becasue we are looking at getting a 95% mortgage when moving somewhere bigger. We have no problem with repayments but we don't have a large chunk of cash to secure a 10% deposit.

Market how it is right now a 95% LTV mortgage we will be butt ****** on the interest rate and we would be (if we choose to go for it) tied in for a while. What I want to know is come the expiry of the term I want to jump ship and go somewhere new where the repayment rate is less.

However if I have only paid 5% deposit would I be right in thinking that I couldn't pick up a cheaper product that required a 10% LTV until the repayments I had made reached the 10% mark correct?

TLDR; can afford to pay but don't want to pay large amount for a long time!
 
No1newts said:
However if I have only paid 5% deposit would I be right in thinking that I couldn't pick up a cheaper product that required a 10% LTV until the repayments I had made reached the 10% mark correct?
Click to expand...

Correct - you need to have the % "equity" in the property to take a product at whatever LTV it's set at. And bear in mind you pay almost nothing off the balance withing the first 2 years of any mortgage. It could even be worse than that - if you take a loan @ 95% LTV and house prices drop by 10% then you'll be stuck on the SVR for ages.
 
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So if your house price goes up a good chunk you can apply for a new mortgage and automatically have a much better LTV ratio?
 
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