Hillwalker123
Registered User
- Messages
- 28
HI there,
I am looking for some advice/opinions please.
I have a mortgage with UB currently, 2.6% fixed for a further 18 months. At the end of that time, it may well be in negative equity, or if not, certainly will not be 80 or 90% LTV. As such, if mortgage is sold to a fund, it is likely it will revert to a SVR, rate of their choosing, but likely to be punitive. If mortgage is sold to another bank, may be fixed rates available. I am one of those people where the selling of the mortgage could have a very detrimental effect.
In order to review options, I asked for a rate offer letter. My thinking was that if I locked in to a new 4 year rate now, it would give some security and time to build up equity and therefore be in a position to remortgage to another lender at the end of that time. I am advised that another lender will not look at it unless 80%LTV or some may consider 90%LTV. Mortgage comfortably within 3.5xsalary. Main issue is negative equity. There is a 4 year rate of 2.55% but breakage fee is 13k, which I was shocked at. They said in letter breakage fee is 6 months interest or a formula involving R and R1, whichever is less, without telling you what R and R1 are.. I have seen other posters quoted €0 breakage cost for similar change in rates/time reamining. It would seem spending 13k to save 0.05% for 4 years is not a good deal. (actual saving would be approx 2200). Only benefit would be the security it would bring us. Of course, if mortgage is not sold for 18 months and fixed rates are available at the end of that time that will be good. I have also heard that CBI are requesting that UB waive breakage fees to help people switch.
I would be grateful for any advice people may have. Have some savings which would reduce negative equity but not enough to get to 90%LTV..
Many thanks for taking the time to read this.
I am looking for some advice/opinions please.
I have a mortgage with UB currently, 2.6% fixed for a further 18 months. At the end of that time, it may well be in negative equity, or if not, certainly will not be 80 or 90% LTV. As such, if mortgage is sold to a fund, it is likely it will revert to a SVR, rate of their choosing, but likely to be punitive. If mortgage is sold to another bank, may be fixed rates available. I am one of those people where the selling of the mortgage could have a very detrimental effect.
In order to review options, I asked for a rate offer letter. My thinking was that if I locked in to a new 4 year rate now, it would give some security and time to build up equity and therefore be in a position to remortgage to another lender at the end of that time. I am advised that another lender will not look at it unless 80%LTV or some may consider 90%LTV. Mortgage comfortably within 3.5xsalary. Main issue is negative equity. There is a 4 year rate of 2.55% but breakage fee is 13k, which I was shocked at. They said in letter breakage fee is 6 months interest or a formula involving R and R1, whichever is less, without telling you what R and R1 are.. I have seen other posters quoted €0 breakage cost for similar change in rates/time reamining. It would seem spending 13k to save 0.05% for 4 years is not a good deal. (actual saving would be approx 2200). Only benefit would be the security it would bring us. Of course, if mortgage is not sold for 18 months and fixed rates are available at the end of that time that will be good. I have also heard that CBI are requesting that UB waive breakage fees to help people switch.
I would be grateful for any advice people may have. Have some savings which would reduce negative equity but not enough to get to 90%LTV..
Many thanks for taking the time to read this.