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They are all the same!No much point since he is with HSBC
They are all the same!No much point since he is with HSBC
They are all the same!
I was joking since I mixed up someone mentioning Nationwide and the person I was replying to who mentioned HSBC.They are not.
Some lenders even have differing terms to different products, especially if you look over time.
Eg there used to me many products where you could be repaid in cash any overpayments. I don't know of anyone with those terms now since lenders found out what often happened was people in financial difficultly would draw it down as a sticking plaster and make out it was for different reasons.
Ah sorry thought you were seriousI was joking since I mixed up someone mentioning Nationwide and the person I was replying to who mentioned HSBC.
Maybe but it’ll have to drop under 2% for it to cost me money.100%, there is significant mental benefit in knowing how much you will be paying long term.
Its likely to cost you more on average, but every persons situation and how much they value a long fix is going to be different.
Maybe but it’ll have to drop under 2% for it to cost me money.
You need to.phome HSBC, but I've never seen a major bank mortgage where you can't use historic overpayments to reduce future payments.Not sure I follow.
With HSBC I was paying amount X per month. I rang 15 months ago and told them I'll pay amount Y per month. Nothing happened to the term length or with the monthly payments reducing each month during the 5 term fix. It all goes into reducing the amount I'll pay in interest sooner.
Sorry If I'm being stupid here.
You need to.phome HSBC, but I've never seen a major bank mortgage where you can't use historic overpayments to reduce future payments.
In the end, overpaying means you are paying down more capital from your loan. This has to result in 1 of 2 things, either you pay less in the future (over the same remaining term), or you pay the same in the future (over a shorter term).
If you paid more for the same term you'd have paid back more than you owed in capital & interest and the lender would then owe you money.
It is a bit more complicated where you remortgage before the full loan is repaid, as then the overpayments have just reduced the total redemption value, but in effect it's the same outcome of lower payments or shorter term on the new mortgage.
+1, that's the point of overpayments after all! My aim is to reduce my repayment period. On my recent renewal I now only have 17 years left of my 25year mortgage though I've only been paying in for 7 years. So my overpayments have reduced my term by 1 year so far.
I notice Jaybee said he/she thinks this "keep payments the same and do not reduce the term". I believe that means whilst overpaying the money you overpay remains accessible in case you need it, until your current deal comes to an end? I select this myself with Nationwide. At renewal time the overpayment is applied and in my case the term is reduced, as that is what I choose. Currently won't finish paying until I'm 62, not ideal. I'm aiming to reduce that by at least another 5 years but who knows what the future will hold....
I'm also overpaying to reduce the term. I do have the flexibility to stay the same term and reduce payments at some point, but that seems a bad option.
I think I am on schedule to finish five years early if I continue to overpay at the rate I set myself.
My wife is of the "we may be run over by a bus tomorrow" school, and would rather have more ready cash now.
Both views are equally valid, but I really want to own outright- as soon as possible.
To be fair a longer deal also means that it tends to costs more to get out of the deal if you need to.I don't understand why so many people only did a 2 year fix? Especially those with "smaller" mortgages. The most expensive outgoing for nearly everyone is mortgage/rent. If you know it's fixed and you can afford it for the next 5 years and you don't need to worry about economic uncertainty then why not fix for 5.
Their logic goes along the lines of: "Well it could go down after 2 years, I don't want to pay more" Yes but there's no guarantee it will drop, it could stay around 5%+ for the next 5 years if not longer especially considering how well inflation is being controlled at the moment...
To be fair a longer deal also means that it tends to costs more to get out of the deal if you need to.
We have just gone past peak inflation, if inflation keeps dropping , we will need to lower base rates so it does not cause more harm to the economy.The lender i am completing my mortgage with beginning of july, is now being advertised at 5.15% for a 5 year fix, thats shocking
im glad i bit the bullet when i did kind of, could have been a lot worse, although its still not great
when i done the search the best this lender was doing on a 5 year fix no prod fees was 4.15%, it then went down to 3.95% which im locked at now,
shortly after they re-advertised this as 4.30%, now its 5.15%
I feel for those who are only just searching for deals now not locked in to anything decent and have to remortgage in the next few months.
We have just gone past peak inflation, if inflation keeps dropping , we will need to lower base rates so it does not cause more harm to the economy.
I still think rates will drop last quarter 2023.
I think the boe will reduce base rate July most likely August, Sep.
You think they'll reduce it next month? Not a chance.We have just gone past peak inflation, if inflation keeps dropping , we will need to lower base rates so it does not cause more harm to the economy.
I still think rates will drop last quarter 2023.
I think the boe will reduce base rate July most likely August, Sep.