Reader Question:
Hi,
My wife and I got onto the property market almost 3 years ago with a 1st time buyer new build home. The paperwork is at home for the actual %age but think it is 3.9%, fixed for 3 years, due to run out this November.
I've not started to look into it yet but I'm wondering whether if I leave it, will it drop on to a variable rate (and should I do this) or should I shop around for a better rate, be that variable/2yr fixed/5 year fixed?
We HAD to get our current mortgage through Halifax as they were the authorised lender for this government scheme (70% mortgage by us) remaing 30% was put up by government and Barratts Homes which is repayable upon sale, so I'm not sure yet if we have HAVE to stay with the Halifax.
Just a little bit of advice in what steps to take when fixed year is coming to an end as this is our 1st mortgage and have never been in this situation before.
Thanks
Dean's Response:
I've had a look into this for you and it is difficult to pinpoint an exact solution as there are several of these schemes, and depending on the developer, different rules apply.
Halifax's standard variable rate is currently 3.99% so it looks like you will see little change in payment, but you are right to consider fixing, although most pundits don't expect any significant move in interest rates until after the 2015 general election....the fact is that nobody knows for sure, so these are simply educated guesses.
You will need to speak to Barratt Homes and find out whether they will now let you switch to another lender, ask them who is on their 'panel'. Once they have given you this information we will be in a better position to help you further so please let me know the outcome.
I hope that helps
Dean Mason - Cemap, Cert PFS.
Practice Principal
Masons Financial Planning
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