mortgage advice

_Jimlad_

_Jimlad_

_Jimlad_

Soldato
Joined
5 Jun 2005
Posts
20,906
Location
Southampton
OK, so the 5 years is up and only one more payment at 6.8% so not really sure what to do, shall i fix again hopefully at a lot lower rate, or drop onto a tracker?

I'm currently looking for a independent mortgage advisor, but just thought i would chuck the question out here.
 
I'm not sure who you bank with, but I've just signed up for a Barclays loyalty mortgage at 3.99% fixed for 5 years.
 
It's unlikely that rates will increase dramatically over the next few years.. Even if they increase by 3%, 4.5% would still be considered low. So take advantage of this while you can. Get a flexible mortgage and invest the capital that you would have otherwise been giving to the banks on the fixed and start to reduce it's term. When rates increase, lower the overpayment. If you can't afford to do this, then why have you got a mortgage in the first place? Overpayment is a long term investment would save £1,000s over years.
 
_Jimlad_ said:
I'm currently looking for a independent mortgage advisor, but just thought i would chuck the question out here.
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If you find one that's really independent and impartial I'll like to know. Everyone I've spoken to biased forwards certain providers and endowment mortgages. When you mention the great deals you saw online they go rather silent and say they can’t help you there. Odd they only seem interesting in selling you something that gives them a big commission. (ie an endowment + life cover).
 
A lot of what I have seen, heard and read has suggested rates will be at 0.5% for about 18 months. Now obviously there are no guarantees of anything, but I'd be taking advantage of it while I could (lower rate and overpay) and then get a fixed when it looks like the BOE might start to shift their decision.
 
I fixed for 5 years at 3.95% about 8 months ago because I didn't want to have to worry about potential rate rises...

now I wish I'd stuck it out a bit longer on my SVR and overpaid for a bit longer, but then no one has a crystal ball and you just have to do what you think is right at the time..
 
I kinda assume the bank has a better guess than I am likely to have and sets rates accordingly. I went fixed but if my finances were comfortable enough I would go variable.
 
Ive just come off a fixed rate of 5.5% and move to a tracker at 2.29%, I have no intention of fixing at least in the next year or two.
 
so coming from 6.8% to the tracker rate is gonna be a nice come down. do different companies vary there tracker rate then? am i worth sticking with Scottish widows for example? or find the company that does the best tracker rate
 
Also remember that if you fix for a couple of years you are no better protected at the end of the two years than someone on a variable rate, it just protects you for the fixed period. My argument is that as interet rates are likely to remain low for at least the next 18 months, if you are going to fix now you should do it over a longer term say 5 years to get any benefit.
 
_Jimlad_ said:
so coming from 6.8% to the tracker rate is gonna be a nice come down. do different companies vary there tracker rate then? am i worth sticking with Scottish widows for example? or find the company that does the best tracker rate
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Since you're used to paying the higher rate, why not go for a flexible tracker, pay what you've already paying already? This will reduce the term and if rates go up, then you won't feel it, only your overpayment is reduced.

edit - as above.. Overpaying has saved 10 years off my mortgage and because the capital is reducing, then so to is the interest charged. It's a no brainier with the rates so low.
 
leoncuprar said:
I fixed for 5 years at 3.95% about 8 months ago because I didn't want to have to worry about potential rate rises...

now I wish I'd stuck it out a bit longer on my SVR and overpaid for a bit longer, but then no one has a crystal ball and you just have to do what you think is right at the time..
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Going fixed shouldn't mean you can't over pay 3.95% is still a very low rate historically so you should be saving money as a result and the best place for this is your mortgage. Our last mortgage was fixed and we were still allowed to overpay.

Currently we are on a two year disscout and as well as overpaying each month we have an offset savings account which now holds most of our savings as the rates on other things are so dire.
 
_Jimlad_ said:
so coming from 6.8% to the tracker rate is gonna be a nice come down. do different companies vary there tracker rate then? am i worth sticking with Scottish widows for example? or find the company that does the best tracker rate
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The rate you get will very much depend on the equity in your house. For the best rates you will need at Lear 35-40% equity
 
ok cheers mate, i do intent to over pay, as i have a bit saved up which is getting me bugger all anyway, so intend to keep the payment around about the same. shame the world will be destroyed before i see the benefits of a paid off house :D
 
a1ex2001 said:
Going fixed shouldn't mean you can't over pay 3.95% is still a very low rate historically so you should be saving money as a result and the best place for this is your mortgage. Our last mortgage was fixed and we were still allowed to overpay.
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I think you can typically pay 10% off the ?principal? the principal being hte initial loan, so if you borrow 100k on a fixed you can pay an extra 10k a year off every year (but no more and you have to be care ful overpay £1 too much are you get a massive fine since you breached the terms)
 
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