Mortgage interest rates

[rainbowinthesky]

Our mortgage fixed rates runs out seeon and we are with Northern Rock so can only take their variable rate if we stay with them. What are our options? We are currently fixed at 5.99% and have been for the last 4 years so havent thought about it tbh until now.

Will Northern Rock not let you take another fixed product?

Have a look at Money Saving Expert and see what deals are around at the moment. A quick search has found fixed deals for 2 years at 3.44% but it depends on your loan to value percentage.

Your options will depend on how much equity you have in your place.

You have quite a few options.

1. Do nothing... go onto the Northern Rock standard variable rate. (Which should be quite low at the moment) Bear in mind that the base rate is likely to rise soon so most SVRs will be keeping pace.
2. Talk to Northern Rock about another fixed rate fixed term deal. If a rise in interest rates would cause you problems, a fixed rate allows you to budget.
3. Find yourself an independent mortgage broker and see if remortgaging with a different lender would get you a better deal all round.

Our fixed rate deal is about to come to an end too - think we're likely to just go on to our lender's SVR - which is currently about 2% lower than our fixed rate. So interest rates can go up a bit and we'll be OK. Likely to have a look at what fixed rates thay can put us on, but not rushing into anything as because of fall in house prices we won't have as good LTV as we did originally

Our LTV is 80% and our mortgage is 220,000 so we pay around 1450 each month so would love to reduce it and if we do for NR variable rate which is a bit lower than our current 5.99 we can manage if it goes up back to 5.99.

Northern Rock dont do fixed rates and other deals anymore since they became publically owned. Our only option with them is to go onto their variable.

It would definitely pay you to get hold of someone independent who can help you shop around and see if there is a different/better deal. With 80% LTV you should find there are some good offers.

At the same time, take the SVR from Northern Rock but keep paying the same amount each month. That way you'd be reducing the outstanding capital (useful when/if you eventually remortgage), reducing the remaining term of your mortgage and saving yourself a lot of interest in the process.

We also have some credit card debt that I thought of using the difference to put extra into. Would it be a good idea to try and get it put onto the mortgage at remortgaging?

Thanks btw for all the comments. So useful!

My feeling is that mortgages should only be used to pay for items that increase the value of the mortgaged property.... extensions, new kitchens, replacement windows etc. The danger of lumping other loans with mortgages is that your LTV% goes the wrong way meaning you get a worse deal. Add in a drop in house-prices and you could end up with a problem

A better idea might be to convert your CC balance to a 0% fixed time period card: take the SVR offered by your current lender: use the money saved to pay off the 0% card before the 0% period expires.

If you change lenders they might do a new valuation. What year did you buy and have you done any improvements? Be careful you don't end up with a downvaluation and being told you have less equity than you thought. Can you check if there are any sales of similar places close by recently on a site like houseprices.co.uk?