I have a fixed rate interest only mortgage. It is 4.9% and expires in November 2008. The mortgage is for £66k

Question

If I stay with Abbey will I go onto their standard variable rate and what is that rate, currently? Will the be any arrangement fees to pay or do I only pay that if I get a new provider?

Answer 1

Ask Abbey, then you will be in a position to shop around for something better.

Further to my previous comment, I have just changed my mortgage company for NO arrangement fees. £95 to a broker and that was it. He did all the shopping around etc and he has saved me over £300 a month on a replacement repayment mortgage. If you own a good lump of the equity in your house, you should have no problem getting a new mortgage despite all of the scaremongering that is doing the rounds at the moment. Good luck.

Answer 2

The "arrangement" fee for fixed rates is buying protection from rising rates, they are rip offs.

Answer 3

The standard variable rate is 7.09% ...

so you will be paying a good deal more.....do you have to go on that rate or can you change providers....I suspect that you will be tied in for that year....you should not have any extra fees to pay....but if you are not tied in then try and get a better fixed rate.

Answer 4

OK, what can you afford?

An interest only loan is stupid---you might as well rent because you aren't building up ANY equity in your home.  And with a declining market  like now, you can end up OWING more than your home is worth.  When that happens, you can't even do a refi.

Suggest you check your options with Abbey and other lenders, see what is possible for you.  Stick with fixed rate mortgages and get away from interest only.