Mortgage Rate Rises
- Thread starter glenimp617
- Start date
It depends on your age tbh. The closer you are to retirement, the more likely your investments would be in low-yield bonds and the balance may tip to selling investments. Your example has a pretty poor LTV as well, so you may want to shift some to get a more favourable rate.
£200k in the bank is much better than a £200k asset though, if you can deploy the £200k to more fun things.
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Soldato
I'm not sure Blackjack and Hookers will make you make much money though.
Ages 42m and 38f, 1 child.
Numbers are roughly what is quoted. Maybe a bit higher in investments (but certainly lower than it was 12 months ago!)
Check the various levels of LTV, e.g.
240k house, 40k down - 4.63% for 25 years 83% LTV 1126/mo
240k house, 50k down - 4.55% for 25 years 79% LTV 1061/mo
240k house, 85k down - 4.35% for 25 years 65% LTV 848/mo
So you don't save much tbh for whacking in more capital (4.63 -> 4.55 -> 4.35) - although this is just quick and dirty maths using mortgage comparison site on a 5 year fixed.
I'd keep chipping away at your mortgage and leave your £200k invested as it'll hopefully do more than ~4%/year, although you need balls of steel sometimes to weather the storms, it'll keep going up unless you have invested in something daft.
Having heard people say all the time about about ltv I was surprised how little it drops after 80pc.
Once you're past that the gains are negligible really. Especially vs swings in the base rate etc
Soldato
The differences have narrowed a lot with the increases, traditionally the bands made more of a difference.
60% LTV was the best band to be in and one I usually aimed for to get the best rates.
Yeah you're right. Maybe because 200k is a small amount of capital relatively.
Started to get my emails out to the mortgage brokers to get my remortgage quotes in.
One of them came back was stating to look at the tracker and discount products aswel as fix.
Only risk with trackers is that is the base rate goes up .
What the general consensus with people here ? Are people mainly fixing ? Going on trackers ?
One of them came back was stating to look at the tracker and discount products aswel as fix.
Only risk with trackers is that is the base rate goes up .
What the general consensus with people here ? Are people mainly fixing ? Going on trackers ?
Soldato
80% LTV was always the key one, like getting to age 21 for motor insurance
20% historically was really the risk margin for a lender
By lender it then varied from 80% down to usually around 60% but with less impact than the top 20%.
40% drop in value (inc costs) is practically unheard of and at that point the lender basically sees zero risk, vs some limited risk still at 80% LTV
20% historically was really the risk margin for a lender
By lender it then varied from 80% down to usually around 60% but with less impact than the top 20%.
40% drop in value (inc costs) is practically unheard of and at that point the lender basically sees zero risk, vs some limited risk still at 80% LTV
I fixed back start of the year. Now?
I'd want to go on a tracker. Dunno if I'd have balls for it. But that's what I'd want to do.
Certainly at a lower ltv I'd be getting a tracker now.
Associate
Just put in an remortgage application for a 5yr tracker, for me it's a manageable risk, and with no ERC I can re-evaluate in 2 or 3 years if necessary.
(32% LTV)
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Interesting that nationwide rates are definitely softening, I got just over 2% for 3 years in June (68% LTV) which shot up to about 6% around the mini budget.
That would have meant another £1000 a month for us, copable but obviously trashing disposable income which has knock ons to the rest of the economy.
Anyway, now they're back under 5% and the best they have seems to be a base rate tracker at +.69% for 2 years and no erc.
For me that seems by far the wisest option, I really don't see rates going up much more, I suspect they'll got into reverse fairly quickly should the tsunami of deflation and recession hit which I think is entirely possible.
That would have meant another £1000 a month for us, copable but obviously trashing disposable income which has knock ons to the rest of the economy.
Anyway, now they're back under 5% and the best they have seems to be a base rate tracker at +.69% for 2 years and no erc.
For me that seems by far the wisest option, I really don't see rates going up much more, I suspect they'll got into reverse fairly quickly should the tsunami of deflation and recession hit which I think is entirely possible.
I agree. Unless you are very risk adverse like like rates are due to fall. You also get more flexibility with trackers.
When 5 and 10s are cheaper than 2yr fixes the banks obviously expect rates to fall
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I'm going to risk a tracker this time round
Interesting. Yeah I checked rates when we first mortgaged 2 years ago and noticed after you get to 60% there's not much difference, so that was like the key milestone. When we remortgage in 3 years, we will be just above 70% LTV and I was generally trying to bust my butt getting below 70 with over payments thinking it would make a big difference to potential offered rates. Do you not think there will be much difference between say 72% and 69% crossing under the 70?
Seens same when comparing mortgages
Thanks for that. I might just try to get under 70 anyway, can't hurt. Well it will hurt actually but you know what I mean.
Looking back on my spreadsheet when we got on the ladder 2 years ago, we seem to have entered at 85.3%. I will have got quotes for if we were under 85 and these must have not significantly affected prices otherwise you can be sure I would have tried to get it under. I recall being under 90 made a massive difference, to the point where we couldn't even get offers if it were above 90. I believe right now we are at 78.9%. This is all based on the house price staying exactly as it was. It actually apparently went up a lot during covid zoopla reckons, and now will probably come back down to where it was and maybe even less as I'm sure we all predict a reduction.
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