Soldato
Are you on a tracker currently? Your ERC makes my 3k feel cheap. If not and you can go to feb 24 on fixed you have nothing to worry about? Potentially
Mortgage Rate Rises
- Thread starter glenimp617
- Start date
Soldato
They may peak around there but, IMHO, they won't drop back down much lower than 3-4pc and will stick there for a while.
Soldato
Out of interest.. what’s better.
Overpaying 1.99% mortgage by say 400-500/month
Or dumping that into savings account at 4-5% ?
Savings is once a month interest rate but mortgage is charged once a day.
What the best approach to maximise impact?
Would say, saving 500/month and dumping it all as a single overpayment once a year better ?
Overpaying 1.99% mortgage by say 400-500/month
Or dumping that into savings account at 4-5% ?
Savings is once a month interest rate but mortgage is charged once a day.
What the best approach to maximise impact?
Would say, saving 500/month and dumping it all as a single overpayment once a year better ?
Soldato
Generally paying down debt is more effective, but math it.
Soldato
Without going into too much detail, my company provides services to several car leasing companies. Pretty sure we have a diverse enough customer base to see us through, but I can imagine those particular customers might be reeling in their spending quite a bit in the coming months/years
I'm not too concerned about it at the moment, but I guess the possibility of us cutting down staff numbers in response is always a potential outcome
Soldato
Always put your money where the highest interest is whether that's debt or savings.
5% of a small amount is much less than say 3% or a much higher amount.
Obviously, but would you not be just saving the interest on the portion you paid off? Therefore what he said is correct.
Associate
I’m currently fixed at 1.39 until 01/02/24. Fingers crossed you’re right. I had a chat with my broker this week. He said mine was certainly up there but not the highest ERC he’s seen recently.
At a personal level I hope that after 5 years of 1.9pc for my fix I'll be down from 207k to 150-140k.
At 140k 3-4pc will be a lot more manageable than 207k.
Also. Obviously hope to move up in salary.
As long as we aren't sitting at 6pc for years I'm not too concerned. Also hope that 5 years is enough to Ride out the turbulence.
What this has really drilled home is that lenders should not be allowed to lend so much. Could have borrowed over 300k Lloyds said
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And that's main problem at the moment, some people have borrowed the maximum they could from the bank with a 5% deposit whilst putting down every last penny of savings and savings of relatives without doing any sorttof self financial assessment about if rates were to go up and are now blaming everyone else about them possibly loosing there house as they can't afford the extra few hundred quid each month, where as others would have not taken on that sort of risk and either brought a cheaper property or stayed renting.
Associate
I'm one of the unlucky ones, my santander fix runs out July next year but can switch to another deal with them in March... going from 1.79% to xx% is going to hurt but I'm also fortunate my DD will stay the same , just much less of an overpayment each month. Wouldn't it be great to have a crystal ball... fix or tracker who knows...
I was guilty of that.
Maxed out to get my house.
And in last 10 years that has been the right call.
Can't really blame people as moving house is so so expensive and hard I totally understand why people want the best they can get for thier first place
Associate
- Joined
- 11 Mar 2005
- Posts
- 1,162
We're currently 6 months into a 5 year fix. Fixed at 1.89 on 55% LTV. 6 months later - decided to have the loft done - we've just been offered an extra 50k at 3.5 - which for additional borrowing is pretty good - prior to that we looked at home owner loans - with some ridiculous rates upwards of 10%. Looks like we've been VERY lucky at timing - which was pure fluke.
As an aside - Accord - who our mortgage is with are offering term adjustments without making any changes to headline fixed rates... might be an option for some - to at least reduce outgoing in the short term. Admittedly interest will increase - but for those struggling / concerned - might give a few years of relative comfort.
As an aside - Accord - who our mortgage is with are offering term adjustments without making any changes to headline fixed rates... might be an option for some - to at least reduce outgoing in the short term. Admittedly interest will increase - but for those struggling / concerned - might give a few years of relative comfort.
Man of Honour
Same dates for me, definitely do the math based on different rates being available in March. I've just done some more after the 4.56% 2 year fix from Halifax seemed mental and the 3.93% 5 year one seems much more sane when compared with what we can expect next year. From my maths, unless I can get a 4.5% or better rate in March (for July end) I'm better off going for this 3.93% 5 year fix now.
I wondered when the mortgage co's would start doing this.
i mean after all if you cant pay your mortgage thats your problem, but if no one can afford to pay your mortgage thats the banks problem.
Wonder if any will offer Interest only as a means to keep the payments coming in without amending the actual mortgage agreement, means the bank still getting their cut.
From what I've been looking at most fixed term mortgages allow a max of a 10% overpayment per year
That's whether it's a one of dumper or regular overpayments AFAIK.
No, I can repay as much of my mortgage at any time, as long as I continue to pay the monthly required amount. Some lenders here do have stipulations about ERCs and how much you can repay, but it's not that uncommon to find a mortgage provider that has no ERC or any overpayment penalties, like mine.
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Caporegime
That's the risk everyone takes. When we fixed in 21 it was the first mortgage rise we had in 10 years but I was just head in the sand and fixed for 2 years.
In reality it should have sparked my interest that our first mortgage rise in 10 years was going to lead onto this. Hindsight is wonderful thing
.I made the same mistake with energy we got our fixed rate at 200 back in march and I almost pooped myself so went on the cap. Now my cap is at £300 a month minus the grant from the government!
Luckily for me my mortgage is only 50K left so these raises are more of an inconvenience but I had a lot of friends who bought at the previous peak and it set them back a decade as they were stuck in negative equity for a while.
As has already been mentioned the next few years is going to be interesting and anyone with a bit of capital behind them will have decent pickings in two years time when the Repo's flood the market. If the previous crash is anything to go by you could have up to 25% of value wiped off houses by 2024/25.
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Associate
That's really good news and sounds very sensible - how does it work, is it a matter of them just extending the end date on current products?