Mortgage Rate Rises
- Thread starter glenimp617
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Soldato
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- Woking
My mortgage broker gave me some good advice some time ago - don't lock yourself into a higher payment if you can avoid it. Make higher payments then if you can. On a month when you can't, you are therefore not penalised.
I had a look at the fees on our mortgage some time ago and they were miniscule - something like 2.5% of the overpayment value. I don't know whether they're always like this, but if so, they're not a big cost.
I think it should be completely removed and replaced with a property tax but that would obviously play horribly with the boomers and we can't do anything unless the boomers say so.
The other option is just to tax people on the way up ie. once you have paid stamp duty on X you are exempt from that portion on your next house. So you pay it on £500k and then if you bought a 1m house then you would only pay it on the £500k difference. Problem with that is that it would massively reduce revenues from people moving house.
A property tax could very easy replace and exceed the current stamp duty revenues if they applied it across the board and only gave exemptions based on recent sales. ie. if you paid £25,000 on stamp duty and your yearly property tax would be £2500 then you would simply say "right, you bought 3 years ago so you still have (25,000-(3x2,500)) in credit. If you bought long enough ago you would likely have paid less than the property tax would have cost you over that period so you have to start paying that tax now.
As I said though, the boomers would riot because their house they bought for hapenny 40 years ago that has 10x'ed would cost them a yearly amount.
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Scottish law is far better for stuff like that.
Actually Scottish property law in general is far better than England and Wales, they dont have all the BS with leases etc. It shows it is possible to adopt the laws, I think in England its a lack of willingness because it'll only detriment rich people.
And, with that house building, they need to ensure the builders build properties suitable for single people and that does not mean shunting all the single people into flats or tiny 40sqm homes with zero outside space.
EDIT: The above was in response to your reply addressing @unwashed potato! post about single people.
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Bungalows.
Not quite sure what you are saying here. Very few boomers are buying expensive houses these days. The issue isn't boomers buying houses, its boomers owning a huge portion of the family housing stock in this country when we are in desperate need of it for actual families. The incentive to downsize would be the lack of stamp duty when they move and the large reduction in the yearly property tax they would pay on a smaller/less expensive house. Currently there are few incentives and many disincentives.
Around me they might sell up at £1m and move down to a £600k place. The move will cost them around £40k all told along with the upheaval etc vs the minimal costs of keeping a larger house vs a smaller one. Perhaps £1-2k/year. If that larger house was costing them £5k/year more and downsizing only cost them £10k it would probably be a far more attractive option.
What would a property like that look like? I don't understand how that would be any different to whats on the market already?
End of Jan i will be making another £4000 overpayment, which will mean £8000 would have been overpaid since nov 2025, will be happy with that , i may see if i can stretch to another £3k by April this year.
I think it refreshes in June , so it will be reset back so i can overpay around £10-11k again without facing charges
I am to do another 10-11k overpayment by end of 2026 - but obviously i will be focusing on savings first.
I think it refreshes in June , so it will be reset back so i can overpay around £10-11k again without facing charges
I am to do another 10-11k overpayment by end of 2026 - but obviously i will be focusing on savings first.
Semi-Detached or Terraced properties. Circa 60m2, 2 Bedrooms, Driveway for upto 2 cars and a reasonable rear garden, say 40-50m2.
Most house builders, in my experience seem to be building minimum of 3 bedroom homes or ridiculously tiny 1 bed properties with no driveways and 10-15m2 gardens (homes upto about 15-ish years old, not necessarily new) Not saying flats are bad, as some people want them.
It's a tricky one. If people want a "better" house (I acknowledge that is subjective) then, yes they should pay for it, but to financially disincentivise single people to the point that their only real choice is to live in flats or extremely small properties (tiny 40sqm homes with zero outside space as previously mentioned) makes it akin to a punishment. Or, if we use a package holiday word, - paying a "supplement" to continue living in a larger/better property over and above the purchase price simply because they are a single person, bearing in mind its not all older retired people living the single life.
I may have the wrong poster but don't you have significant savings of >£100k already? Are these cash savings (everything excluding pension e.g. Cash, ISA, Shares etc)?
Ye,
the majority of my savings at the moment are split between
Premium bonds
Cash ISA (Currently sat in trading212)
Chase savings
I am looking to start a S&S ISA in April, i dont have one of these yet
I only started making lump sum overpayments to the mortgage in Nov 2025. i want to try and get the balance down abit and hopefully when i need to remortgage again the rates are abit lower, currently im on a 3.95% which was started around 2.8 years ago, so i still have maybe 2 years or so to go
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Soldato
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You can just add one to T212 where your cash ISA already is, can then freely transfer funds between that and the Cash ISA as well. Simplest solution don't even need to wait until April tbh.
Does the rates depend on the platform you use? T212 being the platform, but the market rates are generally similar across different platforms?
yeh i know you can move money between Cash & Stocks and shares ISA.
although i dont know the approach im going to take yet, i may just move some funds from my Chase savings to the S&S ISA in April
With regards to the mortgage yeh i want to try and chip away at this
Soldato
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What do you mean by rates?
My main point was that you can open the S&S part of T212 today without much hassle and then just deposit money as usual to the cash ISA side before moving it over to it.
The ISA limit is still a yearly limit of £20K and at the moment it's shared between both the Cash and S&S ISA products, so if you already reached that limit you can't deposit new cash until that resets.
But nothing stopping you adding the S&S ISA to T212 anyway so you can see how it works.
Yeh understood, as i have £30 left on my ISA allowance for this year, i may open the S&S ISA now in trading 212, however, i dont know if im going to yet "move" money from my cash isa or just dump some chase savings money to it and keep the cash isa for a bit longer
Soldato
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In most cases, the break-even period between an overpayment charge and the interest saved is well under a year. Provided the mortgage is held beyond that point, you're going to be in a positive position.
At the very least, it's worth doing the calculations.
At £100k, you'd be pay £2,500. 50k, £1,250. That's not much when compared to interest on a mortgage
Soldato
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Cash in S&S ISA in T212 actually earns more interest than the Cash ISA does weirdly, it's a little riskier though (not protected 100% the same as Cash ISA is).
You could open it even if you have £0 allowance left, moving cash between the two doesn't use any of your allowance as it's already deposited with them.
It also depends on your terms, my overpayment penalty reduces with the amount of the term I have left.
I’m in a 10 year product due to expire in 2029, it’s been particularly punitive up to this point. Not that I’ve go close to the annual allowance and my rates half what you’d get in a basic savings account so it’s not exactly a priority.
I’m in a 10 year product due to expire in 2029, it’s been particularly punitive up to this point. Not that I’ve go close to the annual allowance and my rates half what you’d get in a basic savings account so it’s not exactly a priority.