Mortgage Rate Rises

We're currently on a 5 year 2.8% running out next september with around £95k left, but are looking to potentially move later this year and trying to have a think about how much bigger we want to go mortgage wise, will now be buying with my wife so in theory could probably get £400k+ (house income ~£90k at the moment) but with the combination of it being a higher rate as well as being much larger that would be a crazy jump in payments and so we're thinking of staying well away from our limit, but wondering what do most people tend to think a good approach is at the moment regarding length of term etc, go for another 5 year if possible or look to shorten with the hopes the rates may come down a bit?
 
GeorgeStorm said:
We're currently on a 5 year 2.8% running out next september with around £95k left, but are looking to potentially move later this year and trying to have a think about how much bigger we want to go mortgage wise, will now be buying with my wife so in theory could probably get £400k+ (house income ~£90k at the moment) but with the combination of it being a higher rate as well as being much larger that would be a crazy jump in payments and so we're thinking of staying well away from our limit, but wondering what do most people tend to think a good approach is at the moment regarding length of term etc, go for another 5 year if possible or look to shorten with the hopes the rates may come down a bit?
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I would simply make yourself comfortable when it comes to term length. We should really have gone for a much shorter term than we did as we have hit the max overpayment each year on our current mortgage. If we had a much shorter term, the base amount we would have had to pay would have been much closer to the overpayment amount we have been putting in, allowing us higher repayments. Well, either that or get one that doesn't have an overpayment limit.

And as for locking in? No idea. Do you value certainty or potentially saving a few quid. The world is in a very precarious place right now with Mr Trump at the helm. Could go either way but it wouldn't surprise me if something drastic happened that caused them to shoot up again.

Our next mortgage will likely be 3-5 years depending on the rate at the time. If we can get under 4% we will likely lock in for 5 years. If its much more than that, likely 3.
 
We changed from a 5 year fix at 1.79% that was running out to a fixed 2 years at 4.67% but it's more than our initial mortgage.

We're hoping that the world gets a bit more sane and we can get around 3% for our renewal in 2 years.
 
Junglist said:
We changed from a 5 year fix at 1.79% that was running out to a fixed 2 years at 4.67% but it's more than our initial mortgage.

We're hoping that the world gets a bit more sane and we can get around 3% for our renewal in 2 years.
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You do know who's running the US right now :p
 
Junglist said:
We changed from a 5 year fix at 1.79% that was running out to a fixed 2 years at 4.67% but it's more than our initial mortgage.

We're hoping that the world gets a bit more sane and we can get around 3% for our renewal in 2 years.
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Yeah I locked 5 in because trump will be out. Unless the dictatorship goes well lol.
 
fez said:
Indeed. My dad said earlier "well at least he can't run again" and quickly followed with the obvious "well, under the current laws..."
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Yeah, you know he's gonna try, but even if he dies from age or assasination, Vance is No2. and he's just as bad as trump, worse actually, as as much as I loath to say it, more intelligent than trump. Not that it's a very high bar.
 
GeorgeStorm said:
We're currently on a 5 year 2.8% running out next september with around £95k left, but are looking to potentially move later this year and trying to have a think about how much bigger we want to go mortgage wise, will now be buying with my wife so in theory could probably get £400k+ (house income ~£90k at the moment) but with the combination of it being a higher rate as well as being much larger that would be a crazy jump in payments and so we're thinking of staying well away from our limit, but wondering what do most people tend to think a good approach is at the moment regarding length of term etc, go for another 5 year if possible or look to shorten with the hopes the rates may come down a bit?
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You could always increase the term length to bring payments down if you can project your earnings will go up in the future then just overpay or remortgage onto a shorter term when your fixed rate comes to an end.
 
Placed remortgage application with our broker this afternoon.

At our initial meeting at the beginning of last week we agreed on 5 year fix at 4.24% with Leeds, with no product fee and cashback on conveyancing.

Today's rates are putting Barclays at the top with 4.06% on a 5 year fix with £200 product fee and £350 cashback on conveyancing fees.

So we've gone for that and will revisit the lender's rates in May just before our current fix ends.

It's a fair bit away from the 2.1% we fixed at in 2020, but we've had rates above 6% since over the years then so I'm glad we've been able to lock in at 4%.
 
fez said:
You do know who's running the US right now :p
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Hoping that any damage is immediate and that the world can start to turn things around, but no-one can really speculate what the market will be doing in 2 years.

We had a 5y fixed at 2.04% that ended last summer, and as the rates were pretty shocking we went onto a 5.14% fix for 2 years (about 18 months left). I did see the rates are starting to dip under 4% now, so I'm hoping we can get a rate below 3.5% by summer of 2026. The big question then will be do we fix for another 2 years and hope/gamble that the rates drop back into 2.x% region by 2028, or do we go for a 5 year and see what happens.
 
bainbridge said:
Placed remortgage application with our broker this afternoon.

At our initial meeting at the beginning of last week we agreed on 5 year fix at 4.24% with Leeds, with no product fee and cashback on conveyancing.

Today's rates are putting Barclays at the top with 4.06% on a 5 year fix with £200 product fee and £350 cashback on conveyancing fees.

So we've gone for that and will revisit the lender's rates in May just before our current fix ends.

It's a fair bit away from the 2.1% we fixed at in 2020, but we've had rates above 6% since over the years then so I'm glad we've been able to lock in at 4%.
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Think you’ve done well there!
 
fez said:
I would simply make yourself comfortable when it comes to term length. We should really have gone for a much shorter term than we did as we have hit the max overpayment each year on our current mortgage. If we had a much shorter term, the base amount we would have had to pay would have been much closer to the overpayment amount we have been putting in, allowing us higher repayments. Well, either that or get one that doesn't have an overpayment limit.
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I don't understand this at all.

Regardless of the overpayment limit, surely you could've just saved the excess until the fixed term ended and remortgaged less of it, settling the balance with the savings?
 
MichaelAwkward said:
I don't understand this at all.

Regardless of the overpayment limit, surely you could've just saved the excess until the fixed term ended and remortgaged less of it, settling the balance with the savings?
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Of course I could but I would have been paying more interest until then…
 
fez said:
Of course I could but I would have been paying more interest until then…
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Depends how you saved it. If we're talking about the last few years then definitely not unless you had a horrendous mortgage. The decade before, maybe but then if you were 5 or 10 year fixed a S&S ISA would've been perfectly suitable. It almost never makes sense to have a shorter term versus the flexibility of lower repayments.
 
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MichaelAwkward said:
Depends how you saved it. If we're talking about the last few years then definitely not unless you had a horrendous mortgage. The decade before, maybe but then if you were 5 or 10 year fixed a S&S ISA would've been perfectly suitable. It almost never makes sense to have a shorter term versus the flexibility of lower repayments.
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We're talking about the last few years where we have been paying 5.19% on our mortgage so no savings rate would have come close to that. As I said, its what we should have done but didn't. I know how these things work and I know what rates we were on vs savings rates and our financial situation. I'm not quite sure why you are arguing with me about this. Everyones situation is different. Mine is what it is and we should have reduced our term so that we didn't hit the 10% max overpayment each year.
 
fez said:
We're talking about the last few years where we have been paying 5.19% on our mortgage so no savings rate would have come close to that. As I said, its what we should have done but didn't. I know how these things work and I know what rates we were on vs savings rates and our financial situation. I'm not quite sure why you are arguing with me about this. Everyones situation is different. Mine is what it is and we should have reduced our term so that we didn't hit the 10% max overpayment each year.
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I'm not arguing with you. Your original post didn't say you had a ridiculous rate mortgage so logically didn't make any sense. If you'd started with that it would've been clearer that reducing the term was your only option to effectively overpay more than 10% (although arguably still marginal over the last few years when cash savings over 5% were possible, particularly if you only fixed for 2-3 years); but when giving general advice that's ass backwards in the vast majority of cases.

Even now with Trump wrecking the US economy and our rates looking like they won't fall much if at all, I'd still want the flexibility of cash savings rather than a higher floor for repaying the mortgage, even if it cost me a bit in interest.

Plus, reading back the original post you replied to, they were asking how long to fix for... Not what term they should get, which are very different things, which again was why your post was confusing and didn't make sense, although to be fair the OP was using the terms incorrectly also.
 
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