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Acliff
I was looking into my mortgage earlier on. To make sure I'm not completely misunderstanding things and using simplified numbers, I reckon the position we are in is as follows.
Borrowed £230k at 95% LTV
Got a rate of 4.79% fixed for two years.
Pay £1300 per month and the interest charges are about £900 per month.
So we've been chipping approx. £400 a month off the value of the loan.
I reckon at the end of the 2 years, we will owe about £215k - £220k (if I do not overpay before then).
The way the property in our area is going, it is not inconceivable to me that ours could be worth £300k by that time.
So, If we owe £215k, that is the value of the "new" mortgage we would need to get.
If the flat is worth £300k, the LTV of the "new" mortgage would be 72% and would therefore afford us a better rate on the new mortgage?
There are a lot of simplifications and assumptions here but am I miles out?