Who’s Shitting Themselves About Remortgaging?

I’m just wondering who is worried about remortgaging? In March 2009 I’m due to come off 2 fixed rate mortgages, and onto an estimated 7.8% standard variable rate. Of course, I’m hoping to remortgage and get a better rate than going onto the standard variable rate with my current lenders. Mind you, how things are going, the new rates probably won’t be much better than something ridiculous like 6%. At the moment one of my rates are on 4.9% and the other 5.3%. The rates aren’t great, but they’re much better than the rates available at present.

I’ve been keeping a close eye both moneysupermarket and Fool to see what the mortgage packages are currently like. Hmm…unsurprisingly, they don’t look too great, even though a few of the biggest lenders have recently lowered their rates in the recent weeks.

Here’s a snapshot of today’s mortgage deals over at moneysupermarket.com for people that want to remortgage (they don’t get any better over at fool)…

Mortgage Rates on Moneysupermarket

God, seriously. What is with these ridiculous interest rates and ridiculous product fees? I remember when it was easy to get a mortgage without additional fees! It seems as if they were the golden days! Also, there seems to be a requirement of extremely high deposits. It’s no wonder a lot of people are struggling, and are going to continue to do so. The baserate is currently at 5%, and there is only one rate close to that, and that’s HSBC with a 4.99% rate. However, they’re sneaky fuckers, because they want a 2.5k product fee, so the rate really isn’t 4.99% when you think about it.

As mentioned, I don’t have to remortgage until March 2009; I’m just hoping things get a little better by then. But for those that need to remortgage right now, things don’t look good great, especially for those that have very little equity in their property(ies).

Fortunately, I’ve always played the game safely; or at least, safely as I can. I’ve put down 15-20% deposits when buying property, and they’ve all been with repayment mortgages. Most BTL landlords get interest-only mortgages, and pay very little deposits. It’s a quick way of building a property portfolio, but it’s extremely risky when the market starts to get a little rough. Even the slightest change in rates can cause major strain, and that’s why a lot of people are in negative equity.

Due to my circumstances, remortgaging shouldn’t be THAT much of a problem, but my monthly outgoings will probably increase, but at a manageable rate *touches wood* Each month I build equity, and on occassion I make lump payments towards my mortgages, so that all makes the situation much better.

However, I don’t think mortgages will get worse. If anything, I think the situation will improve, because no one is borrowing right now, and lenders need to get people borrowing again. The only way people will start borrowing again is if their rates become more appealling.

What’s your situation?

I’d love to hear your remortgaging situation, people. Anyone have any tips, or discovered a real gem of a mortgage deal out there?

Like this post? Then maybe you should sign up to my FREE newsletter so you receive more like it!

4 Comments- Join The Conversation...

Guest Avatar
Dave. 3rd August, 2008 @ 21:45

I have just remortgaged 58000 (property value est 150,000)20000 remortgage / 38000 int only.(fixed 5.68)
10 yr payment 407.00
(Currently overpaying up to 400 month to reduce interest)

I guess this the sensible option?

Then I was looking at outstanding capital payment via equity release? If so do I still have the remaining term to pay outstanding capital. (52 years of age)

Many Thanks
Dave.

1
The Landlord Avatar
The Landlord 4th August, 2008 @ 08:32

Hey Dave,

In this climate, overpaying is always sensible. Who did you decide to borrow from, and was there a product fee (if you don't mind me asking)?

Because of your age, most lenders won't go beyond the age of retirement, which is 65. So if you release equity, I think the most you can stretch it will be an extra 3 years (13yr plan). But it depends on your lender.

Kind regards

2
Guest Avatar
Elaine 24th October, 2008 @ 13:05

Hi there,

I own a BTL property with a £97k interest only mortgage which is due up in March 09. At the time I took the mortgage the flat was valued at £115k, now I reckon I'd struggle to get £100 for it, even though it would have flown off the shelves at £130k a year ago...

Hopefully the mortgage market will improve a bit by March as you say, but I am shitting myself nonetheless!

There's not much advice you can give me I'm sure, I think I know I'm in a pickle - but I wanted to let you know I like your blog and have subscribed.

I'm with you on the doom&gloom brigade - in fact I think that's the main reason we're in this big bloody mess right now. So I'm proudly going to stick my head in the sand for the moment and jump off the remortgage bridge when I come to it.

Take care
Elaine

3
The Landlord Avatar
The Landlord 24th October, 2008 @ 17:42

Hey Elaine,

Thanks for your kind words.

You're in the same situation as many, many, many people! With house prices decreasing and mortgage criterias becoming tougher, everything is looking extremely scary. With a lot of people falling into negative equity, remortgaging seems impossible.

But hopefully by March the situation will be better. Banks need to start lending again and the housing market needs to pick up, otherwise the entire economy will just collapse. I'm not sure how much better things will be by March, but i suspect there will be an improvement. Fingers crossed!

I imagine the problem is that most lenders will only offer OK rates with the condition of a max loan value of 75%! Very few people have 25% equity these days- especially those that purchased with in the last 2 years.

I wish you the best of luck.

4

Please leave a comment...

Nobody

Nobody

Landlord

Landlord

Tenant

Tenant

Agent

Agent

Legal

Legal

Buyer

Buyer

Developer

Developer

Enthusiast

Enthusiast


Popular Landlord Categories