I've got a Standard Life discount tracker mortgage and the discount part expires in a couple of months by which time we'll have about 220k left of our 235k mortgage, that we got on our house which we paid 245k in total for.

Unfortunately Standard Life haven't passed on the base rate cuts and their SVR is 5.34% ❗

So am I pretty much stuck with that till the market improves?

Ask a financial adviser – you will probably get a better rate.

depends what the house is worth now – any ideas? looking at the standard life website they don't have many deals available – you might be able to move to natwest or someone if you have more than 10% of the value, otherwise you're a bit stuck

depends what the house is worth now – any ideas?

Well Zoopla reckons (with High confidence) that it's dropped to about £233k from their estimated value of 255k when we bought it 🙁

So if they go by that then I definitely don't have 10% of the LTV

I (and I suspect quite a few other people) am in a similar situation. Fortunately my SVR isn't quite that high, but I've got no chance of re-mortgaging at the moment.

Which is crazy really. My mortgage payments are only about 15% of my income (gross), but no-one thinks that's good enough to loan me anything!

Crap innit?

My mortgage payment is a bit more than 15% of my income, but we could still comfortably pay it and the other monthlies without my wife's income (who earns quite a bit more than me).

I guess it's back to overpaying the mortgage and trying to drag our LTV down a bit.

When your loan started there would have been a SVR at that time, probably a set amount above BBE. That SVR would have tracked the BoE base rate, both up and down. The current SVR that is advertised will not be the SVR you go onto. Dig out your old mortgage offer or illustration and see what the SVR was back then. Then take off the amount that the BoE rate has dropped and you should have your new rate!

Drop me an email if you want more info: chris dot howard at philiptenglish dot com

Really? How does that work. I just assumed that you'd go to whatever the current SVR is, otherwise what's the point of it?

Yeah I'm pretty sure that would mean I'd be moving from a "discount rate" to a lower standard rate – which seems a bit odd.

Will definitely check it out though, thanks.

Just had a look at our agreement (drawn up in Sept 2007).

At the time of the agreement the Standard Life SVR was 7.31% (and at that point the BoE base rate was 5.75%)

We got a tracker with a two-year discount of 1.32%, making our rate at that time, 5.99%.
That discount period expires next month.

I've got a letter from Standard Life saying that at that point we'll move onto their Standard Variable rate which is currently 5.34%

Which fair enough is still lower than our original "discounted" rate and that's lovely.
But their SVR has only fallen by 1.97% when the BoE rate has fallen by 5.25%

Which leaves me feeling like I'm getting rather pumped. 😡

glenh – Member
I (and I suspect quite a few other people) am in a similar situation. Fortunately my SVR isn't quite that high, but I've got no chance of re-mortgaging at the moment.

Which is crazy really. My mortgage payments are only about 15% of my income (gross), but no-one thinks that's good enough to loan me anything!

The reason no one thinks thats good enough to loan you anything is because you have displayed the classic signs of why this country is in trouble. If your mortgage payments are only 15% of your income, why have you not got a better Loan to value ratio??? More to Graham S than you Glen if yours is higher. You are basically asking for a mortgage without a deposit and expecting to get the same deal as others who have big chunks of equity because they didnt spend the other 85% of their wages every month

The entire principle of the current lending crisis is to stop people getting themselves into the OP's position. Yes its ok for when times are good but itt relies on a rising market value. As soon as there is a drop, you are fubarred.

its also strange that the lenders vary so wildly. I'm in a similar situation, although at over 4x initial multiplier, my mortgage was taking up far more of my income. Natwest, who I'm with, are more than happy to take the last valuation (pre-crash) which put me at 80% ltv (5 year fix @ 5.09) rather than send out someone to re-value the property now.

You are basically asking for a mortgage without a deposit and expecting to get the same deal as others who have big chunks of equity because they didnt spend the other 85% of their wages every month

At the time we got our mortgage we had actually saved a fair bit for a deposit. But at that point (in the days pre-crunch when folk were still getting 110% mortgages with cashback), our FSA reckoned he could get us a good enough deal with a smaller deposit so we held the rest back to pay the fees and put in a new kitchen.

We did go through a spell of overpaying £500 a month into the mortgage, but now there are kids on the way and saving for an attic conversion for more space is looking like a priority!

The entire principle of the current lending crisis is to stop people getting themselves into the OP's position.

The lending crisis is about people who find themselves unable to pay surely?

We're perfectly able to pay because we took out a mortgage we knew we could afford – I'm just a bit pissed off that the drop in our equity and the tightening of mortgages means that we're going to be trapped in such a (comparatively) crap SVR rate while others also on SVRs are benefiting from the base rate reduction.

It's not a major issue though. There are plenty far worse off from the crunch.

For the sake of clarity I just did a quick calculation:
my mortgage payment is currently around 59% of my monthly net pay. 😯

But my wife is considerably better paid than I am. 8)

TheLittlestHobo

Succinctly put.

House prices are so high these days that expecting folk to have a 30 or 40% deposit just isn't realistic.
First time buyers are doing pretty well if they can save up 10%.

Well I think you should use a different advisor next time. In August 2007 we took out our re mortgage with the Woolwich/Barclays at BOEBR+0.18% tracking for the life of the mortgage. Curiously when we went back this summer for more they didn't want to give us the same rate again. We put the new borrowing on a further advance at 5.7%.

Well I think you should use a different advisor next time. In August 2007 we took out our re mortgage with the Woolwich/Barclays at BOEBR+0.18% tracking for the life of the mortgage.

We were both first-time buyers taking on a new mortgage with probably around 9% deposit – we weren't going to get a deal that good.

In fact, at the time we were pretty pleased with the deal we got as it was way better than I got from mortgage comparison sites (especially as it met our other criteria: overpayments allowed and no penalty for moving after two years).

Edit: Bear in mind that at the time, Standard Life SVR – 1.32% discount was effectively the BoE rate + 0.24% which isn't a bad deal for a high LTV first-time buyer. And not that far off yours in principal.

The only issue was that we didn't expect the gap between the SVR and the BoE rate to more than triple in size! Or for the property market to collapse, kill our equity and cut off our escape route.

jebus. there is a heady combination of superiority and smugness in here….

Ah, it did have a max LTV of 85%. I'd be bloody scared these days taking on quarter of a million as a first time buyer. We saved hard for nearly a year to get ten percent deposit on our £33k first place.

Yep, we saved very hard to get a 9% deposit on our 245k first place!!

If your mortgage payments are only 15% of your income, why have you not got a better Loan to value ratio??? More to Graham S than you Glen if yours is higher. You are basically asking for a mortgage without a deposit and expecting to get the same deal as others who have big chunks of equity because they didnt spend the other 85% of their wages every month

Why does that matter? So what if I don't have a lot of equity? I'm a very low risk of not making my repayments, the loan is still secured for the full value, and the banks will make more money from the higher value loan.

The reason the market is in a mess is partly because of lending to people who couldn't afford it, not specifically lending high percentages of property values.

Succinctly put glen 🙂

To the OP you will be lucky to find an interest rate below the level of the Standard Life SVR unless you have more than a 10% deposit regardless of any other factors. The long and short of it is that, although you may pose a low risk to a lender, any new lender will look at it and say that you are currently a risk to Standard Life and not them.

The availability of better high LTV deals is getting easier and given that lenders have pledged to lend 10's of billions of pounds more next year than this year should help the situation.

FWIW i would say that its likely that the mortgage market will be alot different in 12 months time and you may find you can get a new deal then, its unlikely that rates will move much between now and then.

And to all those smug gits who took a chance on interest rates a few years ago and went with a tracker i doubt your comments make the OP feel much better about their situation, hindsight is a wonderful thing 🙄

Thanks bigsi.

Yeah I figured I was fairly screwed. It hasn't really come as a surprise to be honest. I mainly just wanted to share my pain and see if the hive mind had any bright ideas.

Bigsi are you a mortgage broker – I think I recognise you log in from a few other threads?

To me, a layman, if my mortgage was only 15% of my income then I'd be over paying as much as possible to rid me of it. Unless of course your happy paying the extra. Unfortunately mine is more like 30% but it is all relative I suppose.

We did overpay £500 a month for a while, but we have other things to save for (babies and an attic conversion to put babies into).

Why does that matter? So what if I don't have a lot of equity? I'm a very low risk of not making my repayments, the loan is still secured for the full value, and the banks will make more money from the higher value loan.

Why does it matter? Regardless of what you are borrowing – £10 or £500,000 you need to demonstrate that if there is a change in your circumstances that you can continue to pay the debt. Your statement that you are still a very low risk of not making the repayments is incorrect (Based on having low equity against high income). The simple fact is that you have demonstrated that you either have other commitments or you are not as good with your money as other are. That therefore increases the RISK.

The loan is no longer secured on a strong footing because your equity has reduced over the last year or two, again making you a bigger risk. No one is saying you shouldnt get a mortgage for this situation, just that you shouldnt get the same lower risk benefits as someone who has a big chunk of equity and has displayed control of their outgoings over a large period of time.

I suspect it is simpler than that TheLittlestHobo.

A mortgage is secured against the value of a home. If the value of the home drops (as many have recently) then the loan would no longer be covered completely. Which is risk for the lender.

A deposit gives the lender a safety buffer. If you only take out a mortgage to 90% of the value of your house (e.g. a 10% deposit) then the value of your house can drop by 10% and the loan will still be covered.

Naff all to do with ability to save or ability to pay IMO.