Mortgage Rate Rises

BigT said:
Would you be willing to share any insights? Because I'm feeling generously spirited today I'm going to say I think some of the heat in here for your posts is because there are some different assumptions going on here about circumstances. You seem to be financially savvy and you're participating in a discussion forum so I'm going to assume myself that you want to share despite the comment that it isn't your responsibility to evaluate people's circumstances.

I don't know the poster's circumstances of course but that doesn't really matter. If I lay out some assumptions here which I think are fairly typical maybe you could give your opinions on what best to do?
  1. You've got £3,600 in cash you've built up over time.
  2. You work hard in a regular job and with the CoL crisis you don't have much capability to add to that on a regular basis as your monthly outgoings are pretty much matching what's coming in.
  3. You're quite time poor. Maybe have a family or the job means you work long hours. The idea of an investment in some sort of side hustle would need to be weighed up heavily against the increased stress, deterioration in relationships, health or anything else you worry about. A few hours here and there might be OK but you don't want every waking moment not working to be a grind on something else.
  4. You have a fairly low appetite for risk. Additionally, this £3,600 is your rainy day money so you feel you want reasonably fast access to most or all of it should something happen. This rules out stuff like pensions (which I'm surprised you didn't mention) which of course gives you a great "return" on your money with the possible tax breaks and employers contributions and it more than likely being invested in the stock market for a good period of time.
In these circumstances the best interest paying easy access savings are what most consider a good option. Yes it doesn't match inflation. Yes its true if you didn't have the assumptions above there are better long term propositions. But with those assumptions (of which I think most of people on here are assuming some of) it's better than doing nothing or leaving it sitting in a current account I think is the point.

That's why the tangible suggestions of premium bonds or help-to-save are constructive to the debate. Other than a first time go at matched betting to rinse the welcome offers off the bookies (and I don't know if they are still so generous these days) I can't think of much myself but would love to hear your views.
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Nope, he was only here to troll. Maybe he'll reappear with his main account and actually contribute to the discussion. I doubt it though.
 
my bank has come back and offered a 3.98% 10 year fix, to replace the 1.79% 2 year that's ending now with a 69% LTV. Has anyone seen any better than this? 5 years are more expensive at the moment and I don't see it coming don't materially lower than that within 5 years, but with potential for higher.
 
rG-tom said:
my bank has come back and offered a 3.98% 10 year fix, to replace the 1.79% 2 year that's ending now with a 69% LTV. Has anyone seen any better than this? 5 years are more expensive at the moment and I don't see it coming don't materially lower than that within 5 years, but with potential for
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Seems like a good current rate if your up for a 10 yearer - at that ltv you might get below 60% in a few years which might make things a bit lower. Just something to bear in mind - is it factored in to your proposed rate?
 
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rG-tom said:
my bank has come back and offered a 3.98% 10 year fix, to replace the 1.79% 2 year that's ending now with a 69% LTV. Has anyone seen any better than this? 5 years are more expensive at the moment and I don't see it coming don't materially lower than that within 5 years, but with potential for higher.
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10 years is a looooong time.

You might not see it but if you'd had this conversation in 2007 you've have covered a global banking crash at least 3 PMs, 2 governments and brexit.

Personally I would be very twitchy about taking 10 years of anything.

Obvs depends on where your life is at but for me 10 years falls well into the "you never know" category.
 
matt100 said:
10 years is a looooong time.

You might not see it but if you'd had this conversation in 2007 you've have covered a global banking crash at least 3 PMs, 2 governments and brexit.

Personally I would be very twitchy about taking 10 years of anything.

Obvs depends on where your life is at but for me 10 years falls well into the "you never know" category.
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moved last year, kid due June, both very tied location wise with careers in London, a house that is a genuinely forever home. The upside if the rates go down back to where we were, we'd save a relatively small chunk of cash over what we're getting from this fix, but on the flip side if they go up 3+% percent, which feels entirely possible, it'd be considerably worse. The 10 year fix is a 15 bips cheaper than the 5.

If things went catastrophically wrong to the point where we had to exit the mortgage, the ERCs I imagine would be the least of our worries! mortgage is portable so we could move it to anywhere in the UK, so unless we emigrated (which feels relatively unlikely with where we are in our lives atm) I can't see what would happen that we had to sell up completely ! (beyond a divorce or something that would fall under "catastrophic")
 
rG-tom said:
my bank has come back and offered a 3.98% 10 year fix, to replace the 1.79% 2 year that's ending now with a 69% LTV. Has anyone seen any better than this? 5 years are more expensive at the moment and I don't see it coming don't materially lower than that within 5 years, but with potential for higher.
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If go the opposite. I'd say we are near a high but might come down in under 12 months. Will it be materially lower? Probably not.

But 3 years? I think it will be lower. But not down to last year. Maybe 2-3pc base rate.



But it won't be bank breaking. At worst you might be paying 2pc over the market rate in 3 years.

I was so so close to taking a 10 year at 1.9. But as its a joint mortgage (relationship breakdown) and its very much not a long term house (moving in 3 years) and erc is high for 5 years I didn't do it.

But I was very very close. If it had been a sole mortgage I probably would have.


I'd say if you value certainty it's not a terrible deal. At 10 years you're well into other issues like above.
 
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rG-tom said:
moved last year, kid due June, both very tied location wise with careers in London, a house that is a genuinely forever home. The upside if the rates go down back to where we were, we'd save a relatively small chunk of cash over what we're getting from this fix, but on the flip side if they go up 3+% percent, which feels entirely possible, it'd be considerably worse. The 10 year fix is a 15 bips cheaper than the 5.

If things went catastrophically wrong to the point where we had to exit the mortgage, the ERCs I imagine would be the least of our worries! mortgage is portable so we could move it to anywhere in the UK, so unless we emigrated (which feels relatively unlikely with where we are in our lives atm) I can't see what would happen that we had to sell up completely ! (beyond a divorce or something that would fall under "catastrophic")
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Fair enough, for me the concept of a forever home is a bit alien... the portable thing is something I should probably know more about tbh as we just signed 3 years but really we would probably move as soon as conditions allowed as the house isn't right for us.. It is portable but I don't really know what it means in relation to moving, like fees wise because we'd likely go up in cost.. do I get a second mortgage or does it increase the current one etc.

It's not beyond my whit to work out I've just been constructively ignorant as I figured quickly after the remortgage in June that it would be a few years until conditions were favourable anyway.
 
413x said:
If go the opposite. I'd say we are near a high but might come down in under 12 months. Will it be materially lower? Probably not.

But 3 years? I think it will be lower. But not down to last year. Maybe 2-3pc base rate.



But it won't be bank breaking. At worst you might be paying 2pc over the market rate in 3 years.

I was so so close to taking a 10 year at 1.9. But as its a joint mortgage (relationship breakdown) and its very much not a long term house (moving in 3 years) and erc is high for 5 years I didn't do it.

But I was very very close. If it had been a sole mortgage I probably would have.


I'd say if you value certainty it's not a terrible deal. At 10 years you're well into other issues like above.
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Moving isn't an issue if the the mortgage is transferable. Which many are.
 
matt100 said:
Fair enough, for me the concept of a forever home is a bit alien... the portable thing is something I should probably know more about tbh as we just signed 3 years but really we would probably move as soon as conditions allowed as the house isn't right for us.. It is portable but I don't really know what it means in relation to moving, like fees wise because we'd likely go up in cost.. do I get a second mortgage or does it increase the current one etc.

It's not beyond my whit to work out I've just been constructively ignorant as I figured quickly after the remortgage in June that it would be a few years until conditions were favourable anyway.
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You port it and then take another mortgage to cover the difference. At the same time you can adjust the term of both mortgages e.g. I have one that was 5 year fixed, I ported it with 2 years left, it is now the same rate (%) but for 25 years. The other mortgage I took topped it up to the value I needed, also for 25 years, but at the market rate today.
 
matt100 said:
Fair enough, for me the concept of a forever home is a bit alien... the portable thing is something I should probably know more about tbh as we just signed 3 years but really we would probably move as soon as conditions allowed as the house isn't right for us.. It is portable but I don't really know what it means in relation to moving, like fees wise because we'd likely go up in cost.. do I get a second mortgage or does it increase the current one etc.

It's not beyond my whit to work out I've just been constructively ignorant as I figured quickly after the remortgage in June that it would be a few years until conditions were favourable anyway.
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It's a forever home in that it's way bigger than we can see our needs ever requiring or wanting, unless our earnings went up exponentially (it's a 3500sq ft reasonably modern but non-housing-estate detached with big garage decent size garden annexe etc).

We've already utilised the portability once, went from a flat in London to this much larger house in a commutable village. It might vary from bank to bank, but at least with lloyds, you could only port the exact mortgage you had (ie amount etc) ie (numbers are random for ease of illustration):

Current lending: 500k
new place required lending: 750k

move the 500k at the existing terms, and then get a secondary product for the 250k. You're obviously tied to only being able to do that with your own bank so can't shop around, which hurt us a little bit but not materially. We just now have a single figure showing in our portal, but when you click into it it shows you sub product 1 being 500k at 1.78% and product 2 being 250k at 2.4% or something.

There were no fees that I recall, beyond ending up with "two products" it was very straightforward.
 
matt100 said:
10 years is a looooong time.

You might not see it but if you'd had this conversation in 2007 you've have covered a global banking crash at least 3 PMs, 2 governments and brexit.

Personally I would be very twitchy about taking 10 years of anything.

Obvs depends on where your life is at but for me 10 years falls well into the "you never know" category.
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Is you can afford it the stability is a nice bonus
 
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