mortgage advice

cm1179 said:
what do you think the best move for me may be in july 2013 when my current mortgage ends? if the base rate has risen am i going to get massively stung or will i be offered a similar rate of my current 5%(ish) seems a little unfair if i have been fixed for this period and then can't get the same rate fixed again...
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You'll be dropped onto the current market variable rate, unless you choose to fix again. If you choose to fix it will be at whatever the current market rate is.

Thats just the way it is i'm afraid, the banks aren't going to honour your rate unless its in their interest.

And if I had the clairvoyance to know what the mortgage rates would be like in 2013 I would be a very rich man...
 
cm1179 said:
what do you think the best move for me may be in july 2013 when my current mortgage ends? if the base rate has risen am i going to get massively stung or will i be offered a similar rate of my current 5%(ish) seems a little unfair if i have been fixed for this period and then can't get the same rate fixed again...
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Why is it unfair - you don't have a right to a 5% mortgage for life. You will be offered whatever products are available at that time. Maybe more than you are on now could be less all depends on what the money and housing markets are doing at that time.
 
cram said:
Why is it unfair - you don't have a right to a 5% mortgage for life. You will be offered whatever products are available at that time. Maybe more than you are on now could be less all depends on what the money and housing markets are doing at that time.
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well, there could be a crisis for me and a lot of other people on fixed if that's the case.
 
I've not read every post but if you have savings why not get an offset mortgage? Offset is normally between 1.9% - 3% and technically it means you're getting 1.9% - 3% on your savings which are still instant access. So in essence if you like the security of having savings, it's a nice way to get the best of both worlds without using your savings to pay off part off your mortgage.
 
cm1179 said:
well, there could be a crisis for me and a lot of other people on fixed if that's the case.
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You're not the only one. Thats why I started over paying last month and I havent had my mortgage for very long either. Dont want be stung when my fixed is up at the sametime as yours.
 
mrbell1984 said:
That's the chance you take with houses.
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i disagree with this as it's not strictly the case. the government cannot logically think that from an economical point of view that it is ok for ppl on trackers to have it good and people on fixed to be faced with a default if rates shoot up, they will have a mass crisis on their hands.
 
cm1179 said:
i disagree with this as it's not strictly the case. the government cannot logically think that from an economical point of view that it is ok for ppl on trackers to have it good and people on fixed to be faced with a default if rates shoot up, they will have a mass crisis on their hands.
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I don't see how you have an argument here, you signed up to a fixed term mortgage with (hopefully) knowledge of the terms and conditions. You understood that by fixing you got a different rate to that of a variable mortgage and that during the term it could be cheaper or more expensive to be on a fixed rate depending on how the market varied.

There are options for longer fixed terms availble if you want them, there were also full term fixed mortgages around but with these you are making a massive trade off for financial stability.

If you get to the end of your term and the interest rates are half what your on would you be happy to stick on your current rate? If not why should the lender be happy to keep you on your current percent if the rates double when your mortgage expires?
 
Siliconslave said:
I don't see how you have an argument here, you signed up to a fixed term mortgage with (hopefully) knowledge of the terms and conditions. You understood that by fixing you got a different rate to that of a variable mortgage and that during the term it could be cheaper or more expensive to be on a fixed rate depending on how the market varied.

There are options for longer fixed terms availble if you want them, there were also full term fixed mortgages around but with these you are making a massive trade off for financial stability.

If you get to the end of your term and the interest rates are half what your on would you be happy to stick on your current rate? If not why should the lender be happy to keep you on your current percent if the rates double when your mortgage expires?
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4 yrs was the max i could fix for. you can't tell me that in april 2009 (when i applied and was approved) anyone could have foreseen what happened? i couldn't have gone straight onto a tracker as a first time buyer, it wasn't offered.
if the rates double, a lot of people will default, the government has to be aware of this.
 
cm1179 said:
4 yrs was the max i could fix for. you can't tell me that in april 2009 (when i applied and was approved) anyone could have foreseen what happened? i couldn't have gone straight onto a tracker as a first time buyer, it wasn't offered.
if the rates double, a lot of people will default, the government has to be aware of this.
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Your lender did not offer a tracker, but they have always been available for first time buyers.

You took a punt because you wanted to keep your payments the same. It is a fair choice to make, though it has backfired a little.

Rates are not going to go up by much in the next 2 years and if they do, they are unlikely to be above what you are currently paying anyway.
 
I fixed for 5 years at 3.89 in June. The variable rates are always several % above base rate so to go on a variable I wouldn't really be saving much but exposing myself to risk.

This was with firstdirect, no fees apart from the £99 holding fee or whatever it was called (I reserved it 6 months in advance). Also there are no overpayment fees, I could overpay the whole thing and leave a few quid in there for the duration.
 
cm1179 said:
i disagree with this as it's not strictly the case. the government cannot logically think that from an economical point of view that it is ok for ppl on trackers to have it good and people on fixed to be faced with a default if rates shoot up, they will have a mass crisis on their hands.
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What I meant was been sold something that may be a bad choice but the choice is miss understanding.

PS just put my first ever offer for a house.
 
cm1179 said:
i disagree with this as it's not strictly the case. the government cannot logically think that from an economical point of view that it is ok for ppl on trackers to have it good and people on fixed to be faced with a default if rates shoot up, they will have a mass crisis on their hands.
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This is rubbish. It's got nothing to do with the government. Trackers tend to work well when rates are static or falling. If rates shoot up its people on trackers or variable rate products that get hit first. I took mine out when rates were rising and was initially paying more than I would have done on a fixed. No one is forcing you to take out a tracker or a fixed or a mortgage for that matter.
 
PapaLazaru said:
I know a couple of the big lenders are putting theirs up this Friday. Most will follow suit more or less.

Mortgage business is cooling down for the winter so profit margins tend to go up.
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Things must have changed over the last couple of years. I worked for a lender for 10 years and they never ever priced their products according to seasonality. It was all about risk and the cost they could buy money at.
 
The differential between fixed and floating at the moment is such that it only really makes sense to go floating unless you are massively risk averse.

Rates are going nowhere materially north for at least 18-24 months and likely significantly longer than that. Low rates keep what's left of the economy going and the government has no real desire to control inflation while the national debt is this high - it makes no sense whatsover for the BofE to put rates up unless inflation goes totally out of control.
 
cram said:
Things must have changed over the last couple of years. I worked for a lender for 10 years and they never ever priced their products according to seasonality. It was all about risk and the cost they could buy money at.
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It is not all seasonal. Europe is playing a big part as well, but they are going to sneak up shortly.
 
Energizer Bunny said:
The differential between fixed and floating at the moment is such that it only really makes sense to go floating unless you are massively risk averse.

Rates are going nowhere materially north for at least 18-24 months and likely significantly longer than that. Low rates keep what's left of the economy going and the government has no real desire to control inflation while the national debt is this high - it makes no sense whatsover for the BofE to put rates up unless inflation goes totally out of control.
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Bank lending and hence mortgage rates are much more linked to inter bank rates than anything else. This was the whole issue of the original problems, the banks stopped lending to each other.
There are signs that the inter bank rate is going up again as they are holding back and avoiding lending or are demanding higher rates again.

Editted to add LIBOR link

http://www.investopedia.com/articles/economics/09/london-interbank-offered-rate.asp#axzz1duDXEYuR
 
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