That makes sense no? The higher the risk to the bank, the higher the interest rate to try and hedge against that. Thats the reason you get better rates on lower LTVs; they are taking less risk of something catastrophic putting the risk bank on the bank if you default. Its the way credit cards work as well.
Mortgage Rate Rises
- Thread starter glenimp617
- Start date
That makes sense no? The higher the risk to the bank, the higher the interest rate to try and hedge against that. Thats the reason you get better rates on lower LTVs; they are taking less risk of something catastrophic putting the risk bank on the bank if you default. Its the way credit cards work as well.
LTVs aside (we are talking about a person withe the same LTV) there were, apparently, instances where a bank would not allow a person to go onto a fixed deal with their current lender due to "affordability" and so they were forced onto the more expensive SVR and increasing chances of them defaulting.
Annoyingly our mortgage debt is split into two products - one we ported across from our flat to the new house, and the second the increased borrowing to purchase the new house. They're out of sync with each other by a year...
We fixed one for 5 years last autumn for .99%. We did think we were doing the whole lot at that rate but our mortgage broker had missed that the two products don't line up in terms of years, and the solicitor casually asked how I planned to pay the £23k early repayment fee just as we were about to execute... I went ******* nuts!
In hindsight, paying the ERC and fixing for ten years at 1.something% would have actually saved us money more likely than not! We ended up fixing the second product last month at 2.59% whilst also borrowing a bit more to do the loft extension... I spent three days on the phone to the bank nonstop as I was expecting rates to go up/banks to increase their products. Sure enough, about 30 mins after we got the mortgage offer through the banks announced the increase!
We fixed one for 5 years last autumn for .99%. We did think we were doing the whole lot at that rate but our mortgage broker had missed that the two products don't line up in terms of years, and the solicitor casually asked how I planned to pay the £23k early repayment fee just as we were about to execute... I went ******* nuts!
In hindsight, paying the ERC and fixing for ten years at 1.something% would have actually saved us money more likely than not! We ended up fixing the second product last month at 2.59% whilst also borrowing a bit more to do the loft extension... I spent three days on the phone to the bank nonstop as I was expecting rates to go up/banks to increase their products. Sure enough, about 30 mins after we got the mortgage offer through the banks announced the increase!
I wonder how the government will deal with this. Families going homeless even though they are trying to do the right thing. Meanwhile people on housing benefit with their feet up. Homeless families would only end up needing social housing anyway.
I don't think they care, they all pretty much have property portfolios, so will probably snap up all the houses that default...
Stupid question of the day - our 2.69% 2 year fix with HSBC comes to an end on 31/12/22, but HSBC have said we can lock in a new deal 90 days beforehand (to avoid any early repayment charge). Are we able to at least start the conversation with a broker ahead of the 90 day mark?
Our original deal was at 90% LTV, but with house price increases + works we've had done, I reckon we'll be down to around 75% LTV now. Expecting to end up with an interest rate higher than 2.69% even with a lower LTV, but I would rather jump on it now than wait.
Our original deal was at 90% LTV, but with house price increases + works we've had done, I reckon we'll be down to around 75% LTV now. Expecting to end up with an interest rate higher than 2.69% even with a lower LTV, but I would rather jump on it now than wait.
Yes, my understanding is that as long as the mortgage offer will last (usually 3 months) until the 90 days you're all good... But I wouldn't be surprised if the 90 day lock in is if you renew with HSBC, that would be my understanding anyway.
So in theory, you could get an offer 6 months ahead, because HSBC will allow you to swap mortgage 90 days early?
Halifax won't allow this. You can lock in a rate 90 days prior to the Fix end date but they won't let you apply until within the 90 days
Ahhh damn, that's a shame
Ahhh damn, that's a shame
Tell me about it... I can't do anything until 1st August at which time I'm envisaging the rates increasing before I get a chance to lock in and I couldn't change lenders
Similar I think with tsb who I was with before
Soldato
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Similar story for me. I had the 90 day thing.
I should have fixed early and taken the early repayment charge. Over the five years fixed deal it would have saved me money at the (old) lower rate.
Our house dropped a band.
Originally 85, just remortgaged into the sub 75 band.
I think it's 60-75 I fall in now
I believe you're looking at 3.3% ish now
Definitely reach out to a broker now and get a mortgage offer to lock in a rate. Offers are usually valid for 6 months, not 3 as mentioned above. Just make sure the broker knows it needs to be from a lender who does 6 month offers. I recently did this as mentioned earlier in this thread (applied end of Dec and locked in rate with Barclays, waited until fixed rate expired at beginning of June to complete).
You may have misread what has been written.on the posts above.
If you stay with your current lender then it's likely they won't let you apply for a new fixed rate until within 90 days of current deal ending.
If you move to a new lender then, yes you are correct, you may have up to 6 months to proceed with the deal as this is no different than a first time buyer.
Edit: having reread them I agree it might be confusing. My initial reply was regarding renewing with the same lender albeit that wasn't clear
Eh? I've not misread anything. That's exactly why I am suggesting contacting a broker now and locking in a rate with a different lender.
I said mortgage offers are usually valid for 6 months not 3. Nothing to do with the 90 day new deal window with a current lender.
You said "Offers are usually valid for 6 months, not 3 as mentioned above."
But most lenders will not allow booking a renewal deal with them until within 3 months of current end date if you are staying with the same lender.
You may be able to book a deal 6 month ahead if the new deal is with a different lender than your current one.
That's the difference I'm highlighting.
But most lenders will not allow booking a renewal deal with them until within 3 months of current end date if you are staying with the same lender.
You may be able to book a deal 6 month ahead if the new deal is with a different lender than your current one.
That's the difference I'm highlighting.
I don't know why you keep telling me about the 90 day window with current lender. I'm suggesting he talk to a broker and lock in a rate now with a different lender, up to 6 months before his fixed rate with current lender expires.
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2.5 yrs into a 10 yr fixed .. plus paid off 2 10% over pays .. glad i did it as interest rates will be going up for the 2-3 yrs ..