Mortgage Rate Rises

Freakbro said:
Yea, like others have said save your overpayment now to get interest and pay off the lump sum when you get a new product.

Though how does that work if you set up a new fixed deal, say 6 months early, which starts when the old one finishes. When do you get the chance to make the overpayment?
Click to expand...
Tell the new provider you want to do this then they will accommodate.
 
IvanDobskey said:
Probably will just go with the SVR in two years time. Only 47k left to pay and would like to get it paid off within another couple of years after.
Click to expand...

Just to add, whilst its lender specific a general rule of thumb is 1% penalty per year left when on a fixed. But some lenders keep a high value for full term
So if you have 2 years left its quite likely the penalty would be 2% of any overpayment.

As others have said its not worth overpaying on your mortgage in that case.
Bear in mind tax on savings £1k for 20% income tax payers, £500 for higher, £0 for top.
Could be worth moving it into an ISA as opposed straight savings if you will suffer on interest.

If your saving early then you can lump sum the payment on your anniversary date. Its an annual allowance the extra you can pay so get in as early as possible.
 
Mercenary Keyboard Warrior said:
Just to add, whilst its lender specific a general rule of thumb is 1% penalty per year left when on a fixed. But some lenders keep a high value for full term
So if you have 2 years left its quite likely the penalty would be 2% of any overpayment.

As others have said its not worth overpaying on your mortgage in that case.
Bear in mind tax on savings £1k for 20% income tax payers, £500 for higher, £0 for top.
Could be worth moving it into an ISA as opposed straight savings if you will suffer on interest.

If your saving early then you can lump sum the payment on your anniversary date. Its an annual allowance the extra you can pay so get in as early as possible.
Click to expand...
Many thanks for that :)

Just that I have a decent chunk of money in my account and don't want to be tempted into spending it over the next two years :p

I guess the obvious thing to do would be to put it in a savings account somewhere.
 
IvanDobskey said:
Many thanks for that :)

Just that I have a decent chunk of money in my account and don't want to be tempted into spending it over the next two years :p

I guess the obvious thing to do would be to put it in a savings account somewhere.
Click to expand...

There are some half decent fixed savings rates about. If that will help you avoid spending it.

https://savingschampion.co.uk/ check fixed ones on here. 2 year fixed rate ISA with Virgin money 4.91% looks good to me
 
IvanDobskey said:
Many thanks for that :)

Just that I have a decent chunk of money in my account and don't want to be tempted into spending it over the next two years :p

I guess the obvious thing to do would be to put it in a savings account somewhere.
Click to expand...

Lock it in to a fixed rate saver then if you think you'd be tempted to spend it!
 
JamesH85 said:
If we are looking at 5% today, what are the projected figures for a 2 year fix?
Click to expand...

Santander are tracking very closely to base at the minute, but I don't know if that's because they have previous mortgage deals to sell off. I'd say if base rate is 5% then 2yr fixes will be around 5.8% ish

Who knows though

:edit: sorry, I was looking at 5yr fixes, changed to 5.8%
 
Last edited:
IvanDobskey said:
:p

I guess the obvious thing to do would be to put it in a savings account somewhere.
Click to expand...
i dropped a proper bollock 6 months back. i got all excited about a decent (at the time) 5 year savings account, its locked so i do not have access to it even taking a hit .

however i completely forgot about the tax implications so now i guess i will have the hassle of a tax form as it will earn over 1k a year in interest.

what i should have done was held back 20k of it for this years isa and probably put the rest in premium bonds. (a more adventurous person may have invested but i am generally risk averse)
 
Last edited:
bigmike20vt said:
i dropped a proper bollock 6 months back. i got all excited about a decent (at the time) 5 year savings account, its locked so i do not have access to it even taking a hit .

however i completely forgot about the tax implications so now i guess i will have the hassle of a tax form as it will earn over 1k a year in interest.

what i should have done was held back 20k of it for this years isa and probably put the rest in premium bonds. (a more adventurous person may have invested but i am generally risk averse)
Click to expand...
If you're employed or take a pension they'll change your tax code to pay the tax anyway, only if you earning over 10k in interest do you need to do a self assessment.
 
Blackjack Davy said:
People with mortgages don't realise how lucky they are. Those on high incomes pay proportionately less whereas those on the lowest rung get housing and benefits. Everyone inbetween those two extremes are squeezed hard
Click to expand...
I would wager that a lot of people on decent incomes didn't start their working life on those wages though - most of them have already been through the pain of renting and loosing a lot of their take home already, or spending extra years living with their parents.
 
Last edited:
BongoHunter said:
I would wager that a lot of people on decent incomes didn't start their working life on those wages though - most of them have already been through the pain of renting and loosing a lot of their take home already, or spending extra years living with their parents.
Click to expand...
Yep spent many a year renting with mates, then living at home for a few years to save for a deposit.

The biggest barrier is you really need two wages so if you’re single you have limited choices.
 
Freakbro said:
Yea, like others have said save your overpayment now to get interest and pay off the lump sum when you get a new product.

Though how does that work if you set up a new fixed deal, say 6 months early, which starts when the old one finishes. When do you get the chance to make the overpayment?
Click to expand...
Before the new one starts.

I asked for a new 209 mortgage with a 211 outstanding balance.
The conveyancing issued me with an invoice for the shortfall
 
200sols said:
If you're employed or take a pension they'll change your tax code to pay the tax anyway, only if you earning over 10k in interest do you need to do a self assessment.
Click to expand...
I have a very weird work setup..... (I dont get immunity) but technically i am under the same rules as a diplomat and i dont pay tax into the uk (my employer pay the government something on my behalf) and other than my voluntary NI contribution i am not allowed a pension either.

it is why i do not want to get into anything tax related as i would need a (probably expensive) specialist accountant. I may just keep my head down and see what happens. technically if i wanted a side hussle i have my full tax allowance i could earn if i wanted to get a moonlighting job, but i have barely enough time as it is.
 
Last edited:
You must log in or register to reply here.
Back
Top Bottom