Mortgage question

[caff]

I'm coming to the end of a 5 year fixed rate deal. I have 20 years left. My outstanding mortage balance is now about 60% of the property value. I'm looking at my lenders current fixed rate deals, and some questions:

1) If I want to move to another fixed rate mortgage with my current lender, what does the 'deposit' value now mean? i.e. if they are offering 4.19% for 5 years, but require a 60% deposit, what does this mean for current customers? Am I eligible if I've paid off over 40% of its current value?

2) For another fixed rate deal, would they do need to do another evaluation of the property price? And would they charge for this?

 

[crazyDAJT]

Its done on LTV, Lone to Value, talking in terms of deposit is not a clear cut thing.

as the housing market is deflating, you LTV may be higher than you think, it may only be 70-80%

which means you would want to bring that down to 75% at least, or else you will get screwed on rates, that said, most standard variable rates are better than deals at current.

 

[mame]

I thought that people who were at the end of their fixed % deal were in a good position to do nothing becasuse the bank of England rate so so low at the moment.

 

[crazyDAJT]

I thought that people who were at the end of their fixed % deal were in a good position to do nothing becasuse the bank of England rate so so low at the moment.

yep, my last point, standard variable rates are very good at the moment, if you have the option just stay on this.

unfortunately i'm just about the start a mortgage so im looking at 4-5%

 

[mame]

Can't you just do nothing and pay the base rate? Why are you at the start of the mortgage if you have just finished the 5 year fixed?

 

[caff]

My lender (Natwest) is stating an APR of 4% which I'm assuming is their 'base rate'?

 

[Gepetto]

Ask them what your mortgage interest rate, and payment, will be once you've finished the fixed rate.

If, as you've mentioned, their SVR (Standard Variable Rate) is 4% (and that's what you'll get) then it might not be worth moving your mortgage at all.

 

[caff]

Variable rate at Natwest seems to be set @ 4% currently. Slightly better than my current five year fixed rate deal.

Their mortgage deals have changed massively since yesterday.... yesterday they were offering 4.19% for 5 years £99 setup fee 40% deposit, now it's the same but with 25% deposit.

 

[stoofa]

I've just come off a 2 year deal and I'm now moving on to my lenders standard variable rate (4%).
To be honest at the moment I can see no point getting myself tied into anything long term.
I'm effectively on a "month to month" replayment right now and as soon as interest rates look like they are starting to climb again then I'll get myself locked into something long term.

At the moment I'm enjoying the fact my mortgage has dropped by nearly £200 per month.
I'm still paying the same amount, however £200 per month is now going in as "overpayments" which helps on numerous levels.

 

[caff]

Fair play if you're happy currently. I'm just concerned that I won't be able to enjoy a variable rate as good as it was before - after all, if base rate is currently 4% when the base rate is 0.5%, what chance do I have if the interest rate climbs up?

A lot of 'what if' questions, but I'd prefer a fixed amount coming out to a sudden jump in interest rates.

 

[stoofa]

If interest rates were to hit 0 then the best deal you're likely to find would be around 3.5%
You will never pay "base rate" - even a tracker tends to track just above base rate (a few were at base rate, but not that many).
You can't get tracker mortgages so you've really only got two options:
Fixed
Variable

At the moment variable seems to make the most sense.
You can get around 4% and we are not going to see a sudden increase in interest rates - expect to enjoy 4% or there abouts for a good 12 months.
Then, once interest rates start to increase get yourself locked in as low as possible for around 5 years.

If we all knew what was going to happen then we'd all be paying quite small mortgages.
However there are plenty of people out there right now paying 5.5% - 6% as they locked themselves in on fixed and are not getting to enjoy the interest rate drops.

 

[Jez]

However there are plenty of people out there right now paying 5.5% - 6% as they locked themselves in on fixed and are not getting to enjoy the interest rate drops.

6.4 here on ~quarter of a mill fixed for another 2.5 years. I paid a slight penalty at the time for the massive LTV's and the fact i am allowed to let my properties.

Hurts though seeing such low rates being batted around

 

[Skidder]

I was going to post a mortgage thread today but am in virtually same position as OP so no need.

I am coming to the end of my deal and can either get a tracker at 2.4 above base or fixed at 4.59 (each for 3 years) or move to variable at 3.5 and see what happens.

What I am mulling is how the mortgage companies will react to the inevitable increases in rates over the coming year. As they didn't pass on the drops fully will there be some lag in them increasing rates?

My gut is to go with variable for a bit and see what happens. Thoughts?

 

[viennese]

What I am mulling is how the mortgage companies will react to the inevitable increases in rates over the coming year. As they didn't pass on the drops fully will there be some lag in them increasing rates?

I think the banks/lenders will raise them at the earliest opportunity. The reason they didn't pass on the rate reductions in full is because they need to claw back the huge losses incurred. Banks are only interested in making money sadly at all costs...

 

[Admiral Huddy]

Get a variable flexible mortgage and overpay while rates are low. This will reduce the capital on the loan thereby reducing long term interest and the term.