Mortgage Rate Rises

[kona786]

I don't believe it.
Nothing is for free.

I asked what's included in this 'fee' My broker (direct) said the fees for remortgage are included in the rate or paid upfront.

It's free because you're paying them interest on your loan which you'd otherwise be paying to a different lender.

And now your just bending what you initially stated which you have to pay 1k in legal and valuation fees when remortgaging.

Simple fact is you don't.

The difference between the £1k product fee deal and my higher rate no fee deal was negligible after the term ended. Literally under a hundred pounds. So I didn't bother.

 

[413x]

It's free because you're paying them interest on your loan which you'd otherwise be paying to a different lender.

And now your just bending what you initially stated which you have to pay 1k in legal and valuation fees when remortgaging.

Simple fact is you don't.

The difference between the £1k product fee deal and my higher rate no fee deal was negligible after the term ended. Literally under a hundred pounds. So I didn't bother.

Paying via a percentage over the term or up front. You're still paying it. That's why it's negligible. It's the fee bundled into the rate.

 

[Scam]

You know in the early 1900's, they demolished poor quality sub standard housing and replaced it with something more suitable for modern living. Why don't we do that now, why do we accept 100+ year old standards as acceptable today?

Because we don't live in the USA or somewhere similar where they have absolutely no regard for history and/or historical architecture. You know what happened to some of the areas like Notting Hill that they didn't demolish? They became some of the most desirable and expensive areas in the country. Without driveways.

The fact that houses with driveways in a big city don't exist does not excuse the issue. Its a legacy problem and if you were designing it now, you would build better transport links and have driveways.

Yes. But you're not designing it now. And if you were designing houses for a compact city like London you also wouldn't be designing detached houses with driveways in zone 1-2 because you're not mental. You're clearly in cuckoo land on this one. Here's a nice street in Hackney, it's a supremely desirable area with a nice mix of fairly sized houses for small families (not for example, like Kensington where there is a large proportion of huge stucco villas that are way to big to be a single dwelling). These are probably £1.5m each, extremely desirable etc. Are you seriously saying the best solution is to bulldoze these to 'improve' them and build driveways? lol...

Anyway, seems like a pointless argument for this thread..

 

[jonneymendoza]

Because we don't live in the USA or somewhere similar where they have absolutely no regard for history and/or historical architecture. You know what happened to some of the areas like Notting Hill that they didn't demolish? They became some of the most desirable and expensive areas in the country. Without driveways.

Yes. But you're not designing it now. And if you were designing houses for a compact city like London you also wouldn't be designing detached houses with driveways in zone 1-2 because you're not mental. You're clearly in cuckoo land on this one. Here's a nice street in Hackney, it's a supremely desirable area with a nice mix of fairly sized houses for small families (not for example, like Kensington where there is a large proportion of huge stucco villas that are way to big to be a single dwelling). These are probably £1.5m each, extremely desirable etc. Are you seriously saying the best solution is to bulldoze these to 'improve' them and build driveways? lol...

Anyway, seems like a pointless argument for this thread..

umm Hackney is a joke mate.

There is literally no houses you can buy of decent 3 bedroom 100sqm size with garden for less thab 1million.

Utter joke and what is to become for the entire city of london within the next few years

 

[kona786]

Paying via a percentage over the term or up front. You're still paying it. That's why it's negligible. It's the fee bundled into the rate.

It's the best deal at the time? Anywhere.

If the market interest rate changed I'd be in the same position but @ a different interest rate.

And I know what you're trying to imply here but it doesn't make sense.

The OP you were referring to took a 10 year mortgage. You said he'd be saving on the fees vs 2 x 5yr mortgages.

We'll no he wouldn't would he. He'd benefit or get stung on the interest rate depending what it was after 5 years. It could be lower or higher depending on the rates of the market. But in no way are these linked to legal/conveyancing fees.

Fact is there is no compulsory legal fee or conveyancing fee when renewing a mortgage.

 

[Semple]

Its not a luxury. Having a driveway, in this day and age, is the baseline. Not having one makes a house substandard, and having a triple large one becomes the luxury. Times change and minimum expectations change (and should improve). Would you argue that someone who had less money should buy a non-insulated house because it was cheaper, or would you argue that the baseline has changed and the minimum expectation now should be a well insulated house. Just because a driveway is not part of building regs does not mean it can be ignored within standards setting. Your argument can be extended to everything - a house is a luxury if we can all live in tents just fine. Standards go up.

Doesn't matter how many times you argue it, you're still wrong. The only way that it could be mandatory for a house to have a driveway is if the law changed to make it illegal to park on the road. We all know that will never happen.

It's a poor comparison to make against amount of insulation. All new homes regardless of whether there is space for a driveway or not will be installed with the best insulation on the market. I would argue that's actually more of a need - keeping your house warm in the winter (plus not costing you a fortune to keep it warm) otherwise we'd all be living in tents.

 

[413x]

It's the best deal at the time? If the market interest rate changed I'd be in the same position but @ a different interest rate.

And I know what you're trying to imply here but it doesn't make sense.

The OP you were referring to took a 10 year mortgage. You said he'd be saving on the fees vs 2 x 5yr mortgages.

We'll no he wouldn't would he. He'd benefit or get stung on the interest rate depending what it was after 5 years. It could be lower or higher depending on the rates of the market. And in no way linked to legal/conveyancing fees.

Fact is there is no compulsory legal fee or conveyancing fee when renewing a mortgage.

I disagree. But no one else has really commented.

But is still hold out that if interest rates (and everything else) stayed the same for 10 years 1 product over 10 years would be cheaper than 2 products of 5 years.

Because there would be a fee to pay twice rather than once.

 

[Scam]

umm Hackney is a joke mate.

There is literally no houses you can buy of decent 3 bedroom 100sqm size with garden for less thab 1million.

I know, but you think it's £1m for a terraced house because people don't want to live there? Do you think they're put off by the lack of driveway which according to @danlightbulb is a basic requirement for a house nowadays? I only picked Hackney because I know they have standard sized Victorian terraces. You could literally pick any terraced street in the UK and make the same point. My friends live in a lovely street in St Albans.. guess what.. on-street parking..

 

[jonneymendoza]

It could be done but would require rework of the current mortgage system. Imagine a mortgage tied to an individual based on your income, and the house its assigned to being the variable element. The security is still the house but the mortgage term and rate is tied to yourself and your personal income and risk level.



Its not a luxury. Having a driveway, in this day and age, is the baseline. Not having one makes a house substandard, and having a triple large one becomes the luxury. Times change and minimum expectations change (and should improve). Would you argue that someone who had less money should buy a non-insulated house because it was cheaper, or would you argue that the baseline has changed and the minimum expectation now should be a well insulated house. Just because a driveway is not part of building regs does not mean it can be ignored within standards setting. Your argument can be extended to everything - a house is a luxury if we can all live in tents just fine. Standards go up.

Your living in a pipedream...

driveways are a luxury in london.

Heck, a actual house, be in a 2 bedroom 70sqm house with a tiny grden is a bloody luxary!!!!

What planet are u living in lol!!!

Practically every new development happening in london are flats/appartments

 

[jonneymendoza]

I know, but you think it's £1m for a terraced house because people don't want to live there? Do you think they're put off by the lack of driveway which according to @danlightbulb is a basic requirement for a house nowadays? I only picked Hackney because I know they have standard sized Victorian terraces. You could literally pick any terraced street in the UK and make the same point.

No its 1m because over the past 15 od years, people have been throwing money at ths hipster place.

It was a complete ******* dump of a place 15+ years ago and i know mate. i grew up not too far from Hackney.

Hackney was so dodgy that you had to watch your back when traveling through it lol.

 

[kona786]

I disagree. But no one else has really commented.

But is still hold out that if interest rates (and everything else) stayed the same for 10 years 1 product over 10 years would be cheaper than 2 products of 5 years.

Because there would be a fee to pay twice rather than once.

You literally banged the nail on the head.

2 x 5 is the same as 1 x10, no more no less. As there are deals with zero fees mean you carry on exactly as you were if on a 2 x 5yr.

Also 5 years rates are usually cheaper than 10 Yr rates so you benefit here. On top of this your LTV will also drop potentially netting you an even better rate after 5 years.

 

[413x]

You literally banged the nail on the head.

2 x 5 is the same as 1 x10. As there are deals with zero fees mean you carry on exactly as you were.

Also 5 years rates are usually cheaper than 10 Yr rates so you benefit here. On top of this your LTV will also drop potentially netting you an even better rate after 5 years.

No I think if you pay fees separately you'd get the better rate for 10 years.
If didn't you'd pay those fees twice for the same rate.
If you included those fees you'd get the higher rate for all 10 years.

The fees seem the same irrespective of the term length. Which suggests they are one off costs?

 

[kona786]

No I think if you pay fees separately you'd get the better rate for 10 years.
If didn't you'd pay those fees twice for the same rate.
If you included those fees you'd get the higher rate for all 10 years.

The fees seem the same irrespective of the term length. Which suggests they are one off costs?

You're contradicting yourself surely.

If you pay the same interest rate over the term on a 10yr and 2x5yrs what difference is there if both ways have the same fixed interest rate.

There are 10 year fixed deals with no product fees, same with 5 year deals. And 5 years usually have lower rates as its a shorter term.

Either way if we were looking at a hypothetical fixed rate then lower term wins.

But in the real world people only take a 10 year for stability and pay more than a 5yr rate at the time for the stability.

 

[413x]

You're contradicting yourself surely.

If you pay the same interest rate over the term on a 10yr and 2x5yrs what difference is there if both ways have the same fixed interest rate.

There are 10 year fixed deals with no product fees, same with 5 year deals. And 5 years usually have lower rates as its a shorter term. Either way if we were looking at a hypothetical fixed rate then lower term wins.

But in the real world people only take a 10 year for stability and pay more than a 5yr rate at the time for the stability.

I don't think I am.

In my case I could have taken out 5 years at 1.93 or 10 at (by coincidence) 1.93.

The no fee bumped that percentage up so I paid the fee.

I assume that if nothing changed in 5 year (if I had taken the 5) I'd be offered the same 5 year fix at that 5 year mark.

At
1.93 + 1k
Vs
"Something higher" no fee.

Therefore by taking the 1.93, 10 years +1k it would work. Out cheaper than 1.93 + 1k +1k.

That's what I think myself

 

[kona786]

I don't think I am.

In my case I could have taken out 5 years at 1.93 or 10 at (by coincidence) 1.93.

The no fee bumped that percentage up so I paid the fee.

I assume that if nothing changed in 5 year (if I had taken the 5) I'd be offered the same 5 year fix at that 5 year mark.

At
1.93 + 1k
Vs
"Something higher" no fee.

Therefore by taking the 1.93, 10 years +1k it would work. Out cheaper than 1.93 + 1k +1k.

That's what I think myself

Yes but it's unusual for 10yr rate to be the same as a 5yr.

And yes however you're assuming the rates are the same in 5 years.

In the real world where rates change, if rates were lower he'd (OP) benefit from a 5 year mortgage right? And as long as the new deal rate is less than his 10 year rate its a win right? Because there are no legal fees to pay (like you suggested there were and what we're discussing) , its just the rate at the time we care about.


This is my point.

And also a product fee is not you paying for legal fees etc. It's an option the lender has to offer to better tailor the deal to your level of borrowing. As there's a tipping point where only larger loan would benefit from an upfront fee and lower rate.

 

[danlightbulb]

ractically every new development happening in london are flats/appartments

Yes and it's wrong.

If those same apartments were built with sufficient parking (forgetting the price impact for now) people living there would have a great deal more opportunity. That is what cars give you. Anyone who doesn't have a car might think they are ok, might be perfectly happy without, but the fact is that having one gives more opportunity over not having one all else being equal. They are massively important and have been for decades.

Arguably it's far more important at the lower income end rather than for the 1 million house because people at the lower end are the ones who benefit most from the increased opportunity a car provides. Why wouldn't we want to improve standards and QOL by providing that facility to everyone, why plow on with the view that driveways are a luxury when things could be better, I just don't get it and it's why in general we have poor housebuilding standards here.

And yet a FTB has to stretch themselves financially to get a house with parking and is criticised for doing so. It's a bonkers view that shows no big thinking and desire for improvement.

 

[jonneymendoza]

Yes and it's wrong.

If those same apartments were built with sufficient parking (forgetting the price impact for now) people living there would have a great deal more opportunity. That is what cars give you. Anyone who doesn't have a car might think they are ok, might be perfectly happy without, but the fact is that having one gives more opportunity over not having one all else being equal. They are massively important and have been for decades.

Arguably it's far more important at the lower income end rather than for the 1 million house because people at the lower end are the ones who benefit most from the increased opportunity a car provides. Why wouldn't we want to improve standards and QOL by providing that facility to everyone, why plow on with the view that driveways are a luxury when things could be better, I just don't get it and it's why in general we have poor housebuilding standards here.

And yet a FTB has to stretch themselves financially to get a house with parking and is criticised for doing so. It's a bonkers view that shows no big thinking and desire for improvement.

Toss in the fact that many new flats and apartments don't provide parking for each person privately and they all opt out of allowing residents who live on these flats and apartment to apply for permit parking on the public roads...

 

[danlightbulb]

Guys I know that these things Im saying aren't overly practical especially in big cities but for me the idea that someone should have to stretch financially to get parking is a joke tbh. And then if they are considered by some to have overstretched because of that and they should have bought something cheaper, I really think that is missing the point and blaming the people whose fault all this isn't.

You could have a person who can only comfortably afford £150k but has a car because of his job, family needs or hobbies and to get parking needs £180k so he stretches himself for it, then said person is criticised for overstretching himself when rates go up through no fault of his own (or any of us - its all economic policy poor decision making that we are now suffering for). I dont think that is right.

 

[adam cool dude]

Yes and it's wrong.

If those same apartments were built with sufficient parking (forgetting the price impact for now) people living there would have a great deal more opportunity. That is what cars give you. Anyone who doesn't have a car might think they are ok, might be perfectly happy without, but the fact is that having one gives more opportunity over not having one all else being equal. They are massively important and have been for decades.

Arguably it's far more important at the lower income end rather than for the 1 million house because people at the lower end are the ones who benefit most from the increased opportunity a car provides. Why wouldn't we want to improve standards and QOL by providing that facility to everyone, why plow on with the view that driveways are a luxury when things could be better, I just don't get it and it's why in general we have poor housebuilding standards here.

And yet a FTB has to stretch themselves financially to get a house with parking and is criticised for doing so. It's a bonkers view that shows no big thinking and desire for improvement.

Or you could just develop other parts of the country as there is plenty of room north of the M25. London is just a cess pit now and is great for the 1% who are multi millionaires but for the rest it is just an existence. It took me 50 minutes to get from Erith to Sidcup (7 miles) today and that isn't even central. Everything is concrete, the air is dirty, the floor is dirty and culture just doesn't exist anymore.

There are thousands of places in the UK where 300K will buy you a large detached 3/4 bedroom house with garage, off street parking and a decent sized rear garden.

 

[Bald-Eagle22]

Back to the OP’s question .

Bank of England interest rate could hit 4% or more, ex-policymakers warn

The Bank of England will probably need to raise interest rates much more sharply than financial markets expect to get soaring inflation under control, former policymakers said on Wednesday.

www.reuters.com

I think BOE interest rate will be around 3.5 % this time next year so fixes will be at around 4% and above.

For myself I still have 2X mortgages on my buy to let’s that are fixed at 2.39 so I’m thinking of selling one and clearing both mortgages. A BTL fix could be as high as 4.5% next year so a rise from a 5 year fix at 2.39 doubles the interest and I’m not passing that increase onto my tenants.