Escaping negative equity

By THIS IS MONEY
Updated:

 

When we moved in 1998 we were in a negative equity situation with an endowment mortgage of £44,800. Our current mortgage, with C&G, is set up as follows: £44,800 interest-only with 17 years left to run and £31,500 repayment with 19 years to run, both on the standard variable rate. Our property is worth about £70,000.

Are we getting the best possible deal?

T.L. Birmingham

Phillip Cartwright, director of brokers London & Country Mortgages, says: Assuming your property is still worth £70,000, the answer is yes because with total borrowings of £76,300 you are still in a negative equity situation and there are no lenders I know that will give you a better deal

in these circumstances than C&G.

But as soon as you have 5-10% equity in the property (say you pay off some of the loan or your property rises in value) go back to C&G and a few other lenders to see if you can get one of the more attractive deals available.

In fact if the £70,000 value you quote is based on the 1998 figure, your property may already be worth more than that now, so it's worth checking.

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