hi there

my mortgage is due for renewal in November and ive been looking round and there do not seem to be any god deals for people with high ltv(90%)

im not sure what to do wether or not to take out a new mortgage paying roughly what i am now (but fix it at 5 years )

or

let my current mortgage fixed term end and drop onto the halifax svr (fixed term is 6.79 i think halifax svr is 3.5) and overpay for a year to get a better ltv??

am i taking a gamble on interest rates staying low over the next year or so or do i just fix at 6.99 with natwest??

or are there better high ltv mortgages available with other lenders??

HELP!!!!!!!!!!!!

Speak to an independent financial advisor about the correct product for you.

To answer your initial question, base interest rates are at 0.5% and we'll be out of recession by January (in all likelihood). That means inflation will start to be an issue again and firms will be able to cope without proper cheap credit so rates will begin to increase. How much, and when, is a question not even the BoE monetary policy committee can answer.

seriously, no-one can tell you this with any certainly except for Mervyn and the MPC

I am on the Halifax SVR and saving loads right now, I won't be moving anytime soon.

IMO, for what its worth (and thats not a lot!), interests rates won't be going up until the economy starts recoving in a REAL sense and that isn't for some time yet (1 year +). Even then they will be increased slowley to ensure the recovery doesn't stall, so for my money, stick on the SVR and put the monthly savings in a savings account.

I know nowt, but FWIW try to pay as much of your LTV off as possible whilst you can

I can't give you advice as i don't have the relevent info on your circumstances etc but you might want to also ask the following questions.

1/ As cashflow gets easier are the lenders (who make money from lending on mortgages loans etc) going to want to lend to a broader spectrum of people including those with higher ltv's ?

2/ If more lenders start to lend again and those that are currently in the market look to take on higher ltv borrowers will this increased competition force lenders to be more competitive in the rates they currently offer.

3/ How much can you afford to overpay by over the next 6 – 12 months and will this equate to a 5% increase in the equity in your property. If not then it almost certainly won't give you access to better rates as lenders band their interest rates in 5% stages.

4/ What would be the harm in sitting on SVR without any penalties until rates start to go up. Your current lender Halifax currently offer new rates to existing borrowers as part of their customer retention program and i can't see this changing in the near future.

If you want some advice then my work e-mail is in my profile so contact me and I'll be a bit more specific to your circumstances.

BigSi

fwiw the finance bods in my work reckon after the general election regardless of who gets in public spending will be slashed the economy will take a nosedive and raes will go sky high

kimbers do you work for the ministry of doom and gloom 😉

kind of institute of cancer research
and to give credit to the finance bods they moved all of the institutes assets out of hedge funds and shares just before it went tits up last year
unfortunately the pru managed our ex pension scheme

At a current rate of Bank Of England Rate of 0.5% you can pretty safely assume they wont go down!

Halifax have a good range of Product Transfer Deals, which if you're LTV is 90% are probebly going to be your only choice.

Get advice from a Professional (I can recommend one if needs be) if your deal ends in November make it as soon as you can.

One thing you can be sure of – fixed rate deals will go up way before Base Rate does, so it will be very easy to "miss the boat" and any saving you make on the SVR now could be negated by the higher rate you end up paying later…

"One thing you can be sure of – fixed rate deals will go up way before Base Rate does"

No you can't, thats just your opinion, see bigsi's thread above…

Woodey – I work for a mortgage lender, so know how the fixed rate products get priced.

With a base rate this low the only way is up; the question is when. The markets will move the supply of fixed rate money to lenders up in preparation for this, historically this is around 6-9 months ahead of expected Base Rate changes.

wellmy current fixed rate is at 6.79 which is quite high .

halifax svr is 3.5%

i have an outstanding balance on my mortgage or £123608 and pay 695.15 per month currently interest only.

ca someone tell me roughly what my payments will drop to when it reverts to the svr ! as i cant work it out??

i was then thinking of overpaying by however much the difference is to bring it up to what i currently pay if you see what i mean.

halifax will let me overpay by 10% a year which is 13200 i think?

am i right or just thick??

Scott -fair enough but you seem to be discounting the fact that the mortage market could become more competitive with new lenders entering the market as money supply eases and the risk to house price falls diminishes. This could force fixed rates down even when interest rates are rising IMHO

unemployment is way high, job security low, a lot of pay freezes –
low interest rates are keeping a lot of people out of reposessions at the mo
when base rates rise will there be a lot more repo houses on the market?

can anyone help me out with my maths above though!!! 😀

Renton – must be something here that will help

Renton – must be something here that will help

renton – to work out your new monthly payment on interest only you take your mortgage balance and x it by the interest rate and divide it by 12.

Scott – If what you are saying is correct then how come 18 months ago when BBR was at 5.5% ish the long term fixed rates were just over 6% where as now BBR is 0.5% these same long term fixed rates are low 5%. The fixed rates are based around what the lender can get the money for and so are driven by the wholesale markets (yes there is a delay) and not directly linked to the BBR,, correct me if i am wrong (i realise that not all lenders borrow money to lend it out but most still do). As far as i am concerned woodey is correct as we have in the past seen fixed rates going in the opposite direction to the BBR. You are also not allowing for increases in the availability of funding particually as the overseas lenders such as Bank of China enter the UK lending market.

Oh and renton if your not tied into the svr then the 10% capital overpayment cap no longer applies but check your original mortgage offer for confirmation of this.

Oh and "missing the boat" is something that lenders play on to secure your business by getting you to commit to a new deal with early redemption penalties as it looks better on their balance books and so makes the share holders/accountants happy.

Commiting early is not always in the best interest of the client 😕

Pricing fixed rates is incrediably complex and dependends on swap rates, which bear no direct corrolation to BBR or LIBOR other than to ultimatly try and second guess them.

With BBR as low as it is there is no way a money market trader will bet on them getting lower – so swaps go up, therefore fixed rates go up. So fixed rates are what the lender can get swaps at – not what they can get funds at.

As for the example given by BigSi; it bears this out – when BBR was high fixes were at 6% and fixes have come down as BoE has, the markets have pre-judged the drops and moved fixed rate money (the swaps) ahead of this hence why fixes are lowered as BoE drops; if you followed the stats (and trust me it's not fun bed-time reading) the fixes moved down prior to BoE reductions.

And the "miss the boat" phrase is very much meant – all the above optimism is based on the fact that the supply of money will increase. However the FSA are imposing increases to Capital Adequacy rules meaning money is begin sucked into reserve accounts, so can't be leant. In additon the bill to lenders of the Financial Service Compensation Scheme has increased dramatically (it's the fund used to bail out ailing banks/building societies) which again limits lending.

Current lending is being funded by Retail Deposits in the main and these funds are being fought for on the high street – evidenced by the fact that you can get a 3% savings rate when the base rate is sub-1%, so mortgage rates will sit on average above this 3% mark (note the phrase on average!).

The only real increase in funding will occur with a sharp increase in property prices (it releases capital from the reserve accounts mentioned above) and/or the re-opening of the wolesale money markets.