Posted on 10 February 2011 by Michael Sniedze-Hinde
My fixed rate ended in March last year and so I went onto the lenders SVR - this actually lowered my mortgage payments and so I left it.
As the BOE base rate will inevitably rise in the near future I'm thinking it is a good idea to come off a SVR. However I have a big problem, I have very little equity (maybe even negative) and my current lender wants a 20% deposit to go onto a fixed rate for example and other lenders will ask for something similar. What options do I have? Do I have any at all? I could maybe manage a couple of rate rises, but anymore and I will struggle to meet mortgage payments.
Any help is really appreciated as I am very worried.
Our current thinking is that there will not be a substantial rise in the bank of England Base Rate this year and we are not recommending Fixed rates unless people want or need absolute security against rises in their monthly payments.
You don't say what your current interest rate is, but with little or no equity in your property you are very limited in the options available to you and the Fixed rates available to you with even a 10% deposit mean you would probably be worse off. For example the cheapest remortgage 5 year Fixed rate at 90% LTV is currently 5.69%.
There is another enquiry on this website entitled "Negative Equity what can I do if I want to move house?" which has a link I recommend you follow. This explains in detail the options available to you and who to contact.
Answers provided in response to Ask the experts are based on the information provided and do not constitute advice under the Financial Services & Markets Act. They reflect the personal views of the authors and do not necessarily represent the views, positions, strategies or opinions of John Charcol. All comments are made in good faith, and John Charcol will not accept liability for them.
We recommend you seek professional advice with regard to any of these topics where appropriate.