# Fixed rate mortage ends this year...advice needed pls



## hap (Mar 1, 2007)

hi there i bought with my partner 3 years ago (when prices were almost as high as they were and rates were over 7%) we had to unfournatelty take the mortgage over 35 years but it was 3 yrs fixed 6.25 which ends this dec 2010. I am sure there are thousands coming ends of their rates, but i know there may be no option to fall onto a base rate as might not be any fixed rates deal presently due to negative equity!!?

we are with nationwide and i assume we will drop onto the variable rate..at the momemnet with rates held at 0.5% for 7 or so months i guess it will be around 3% hence if it stays similar or even if by dec goes upto 1-2% mortgage deals will be around 4-5% . Basically with some luck our monthly payments will be less.

should we start looking around soon elsewhere?
how can i get the term of my mortgage recalutaed so effectively we pay near what we do each month now (assuming the rates dont jump up drastically and assuming there are deals still available)but reduce the terms to say 28 years (as of dec 2010 we will have 32 yrs left)?

Many thanks


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## -ROM- (Feb 23, 2007)

I would suggest two options

a) go see a independent financial advisor

b) Cheltenham and Gloucester (parts of lloyds bank) are really good both in terms of rates, etc but also the service they give you


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## VixMix (May 8, 2008)

go to www.moneysavingexpert.com and have a rake about firstly on the main site, for a good altogether education on mortgages and then on the mortgage related forums where there is a wealth of information that will come your way free.

There are, of course, pros and cons for each of your options. If you re-mortgage to a shorter term, you will be subject to fees and also your house will be revalued which may incur a negative equity situation or reduce your equity percentage. As a result of the financial situation - especially in the mortgage sector - most lenders have tightened their criteria massively and you will not get anywhere near a decent rate unless you are carrying 10-20% equity in your house. Some lenders will not even entertain you!

You could approach your current lender and ask for a re-evaluation. I do this often with mine (Yorkshire) and find it can be beneficial. They should give you figures for changing your mortgage product and you can explore other options.

It is worth investigating whether your mortgage allows overpayments. Many do up to a percentage of your mortgage. EG I can pay up to 20% of my mortgage in overpayment every year without penalty, so with a 100 thousand mortgage I would be able to overpay by 20,000 in a year. 10 - 20% is common. You may set up a standing payment every month to keep your payment the same as it is just now, then re-assess the mortgage market every year for the best time to switch products.


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## hap (Mar 1, 2007)

thanks vixmix very helpful.

in terms of reevaluation what do mean exactly? have nationwide value the house again?


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## VixMix (May 8, 2008)

As far as reevaluating with Nationwide, I mean meeting with your local mortgage advisor to look at your mortgage account and discuss your options. They have all the info in front of them and can run off a few figures to give you instant feedback on - for example - how much a new fixed rate would cost; what fees and penalties may apply; what your chances on getting a new fixed product or changing terms of your mortgage would be; comparing changing a mortgage product with overpaying your current one.

I generally find that they have the tools to give you information, printed out, instantly which will help with your investigations and decision making.


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## hap (Mar 1, 2007)

yeah will do that and also go see nationwide see what they can offer, if the rates stay as they are then either way our monthly repayements will be less, if i can overpay as you say, then might as well carry on paying what we have been doing so just go on the variable rate then asess, i do need to do somemore research lol. if the rates start steadily increasing then we could look at a fixed rate (there are some there is a post a few threads down fixed at 3.75)

ta


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## DiscoDriver (Oct 27, 2009)

If you're on a fixed rate with the Nationwide then very likely you can pay up to a maximum of £500 per month overpayment (this is the max I'm allowed to pay with the Nationwide). I come off of the fixed rate in August 2010. I am likely to stay with Nationwide on their SVR and continue making the same payments I do at the moment (to pay off capital faster).


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