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Remortgage after 5 years

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  • Remortgage after 5 years

    Hi all,

    Mr fiance and I are NRAM customers (ex Northern Rock) We are just coming to the end of our 5 year fixed rate at 7.29% and will be reverting to their SVR which is 4.79%.

    We brought our property for £176,000 in 2007 (our borrowing consisted of £167,200 mortgage, £15,800 and un-secured loan.

    I have worked out we have paid £78,000 over the last 5 years off our mortgage but have actually only paid around £2,000 of the total balance (gut wrentching!!)

    My question is, can we remortgage? i know we would need a 100% LTV mortgage but due to the fact we have had a mortgage and paid it for the last 5 years without even a late payment let alone missing one, would anyone take us on? i can understand that if we were a new customer the answer would be no. But as we have had 5 years of good history behind us would this work in our favour?

    Many thanks in advance

  • #2
    Re: Remortgage after 5 years

    Hi there,

    Firstly, your calculations seem to be incorrect. If your mortgage and loan balance totals £176,000 and your fixed interest rate over the last 5 years has been 7.29% then you will have paid a maximum of £64,152 of interest over those 5 years. Therefore, if your total payments over this time have been £78,000 then you ought to have repaid at least £14,000 of your mortgage balance, not £2,000.

    This is important as it may mean that you do not actually need a 100% mortgage as you think.

    Check your correct mortgage balance with NRAM first before you start to check what you can do next, I think you'll find it is less than you think.

    Also, bear in mind that the unsecured loan part of your mortgage would not necessarily need to be included in the balance that you switch to a new lender - but if you leave it with NRAM after the mortgage has been switched it is likely that the interest rate will increase to above 10% so the monthly payments on it will rise.

    Considering that your interest is due to fall by 2.5% when your fixed rate ends, and therefore your payments will reduce accordingly, is it desperately important that you switch lenders anyway?
    Property for sale in Torquay