Hello Me2011 and welcome to the forum.

You raise a good question that I think a lot of people will be considering. There are some obvious advantages to having a fixed rate during a trust deed.

You lender may offer you a replacement "product" when your fixed rate expires. Normally you can start asking them about this around three months before the expiration of your current deal.

If no replacement product is on offer the mortgage will normally revert to their SVR (standard variable rate) which is likely to fluctuate along with any future interest rate changes. If interest rates remain as low as they currently are you may find that being on the SVR is a comparatively cheap (if insecure) option right now.

You may therefore look to get a new mortgage elsewhere. That's going to be tough in the current mortgage market while in a trust deed. As you will not be looking to raise any extra money it may not be quite the same closed-door as it is for those who are looking to raise equity. However, unless there is plenty of equity in your home there may not be any products available to you. The existence of the trust deed would be likely to have an effect on the cost and terms of any new mortgage as well.

In the first instance I'd suggest that you confirm when your current fixed rate ends. I'd then be sure to speak to this lender a few months before the end of the mortgage to find out about any replacement offers. If there aren't any, or you do not like what's on offer, speaking with a mortgage broker should enable you to assess whether switching elsewhere is viable and desirable.

Thanks for your advice, I will double check with my mortgage lender re the date the fixed rate ends first. If after considering all the options, I do have an increase on my monthly mortgage payment, will my trust deed provider take this on board with the possibility of my trust deed contribution being lowered? Things are tight as they are, I wouldn't like it to get any worse !!

Hi.

If your mortgage payment increases through no fault of your own, and nothing else compensates for that increase, your trust deed payment will need to decrease as it would otherwise be unaffordable.

Excellent, thanks for you help.

Another question ! - As discussed earlier, if my mortgage increased to the point that my trust deed contribution needed to be decreased, would my trust deed period have to be be extended ? (please say no, please say no!)

Hi Me2011

I would agree with everything TDA has said. Unfortunately, the days of re-mortgaging whilst in a Trust Deed are pretty much over. With regards to you last question, I would hope your Trustee would not lengthen the term of your repayments, but you will have to confirm this with your Trustee. I can only tell you that my firm would not expect your Trust Deed to be extended. My understanding of the Accountant in Bankruptcy's guidance is that you should not be penalised for something which is outwith your control. I am sure Mark, Kevin or TDA will also comment on this.

It really is up to your trustee I'm afraid, ME2011. I believe many do look to increase the term to compensate for reductions in contribution level. Just have to cross your fingers and ask the question!