Mortgage costs

[Princess Morripov]

It depends on how much the mortgage is for though, non?

<snip>

I will snip that in a bit but I would genuinely fix if I could (but I can't for any of the above as I can't get a better rate/I want to sell)

[Lily]

I guess that was a stupid question really. I think I will have to fix.

The valuation chap has been around (2 hours late FFS) and I have a feeling he won't value it as much as the mortgage advisor did as he said things haven't gone up a lot. If he undervalues it I won't get the mortgage that has been secured for me. So I'm a bit stuck really.

[Beatrix]

It might be worth asking if it’s possible to move to an interest only repayment mortgage (sorry not actually certain what they’re called) for a year or two then reassess? Rather than fix for a longer period. It would mean lower monthly payments which might give you a bit of breathing room and comfort. Interest rates are predicted to peak at 4.5% and perhaps best not to fix on the way up and do it when things are a bit more stable and therefore mortgage offers are perhaps a bit more reasonable.

[Topcat]

An interest only mortgage will do exactly as it says, it will cover the interest but not the repayment of the loan and so costs less on a monthly basis but leaves you with more to pay off if you carry on with it until the term ends. Presuming you haven't set up a savings vehicle to cover this.

A repyament mortgage will clear both interest and debt at the same time, which obviously costs more.

[Luna]

Definitely switch to interest only for the time being. If you are going to inherit in the future it's not such a pressure to get things paid off.

[Beatrix]

Yes, I was suggesting it as a way to reduce the immediate financial burden now. Not for long term.

[Topcat]

Totally get that and its a good idea.

I was more explaining the difference between the terminologies that were a bit mixed up previously.

[Lily]

Apparently my equity isn't high enough for interest only.

I can't afford a shorter fixed rate either. I am considering going down a tracker rate as when it goes down it goes down. But if interest rates are unlikely to get back to where they were (I had a 2.6% or something) maybe I just accept this is life for the next few years!