Mortgage Rate Rises

[meepmeep]

£2K fee is pretty high, if Nationwide will do the same sort of rates consider switching to them. They do £999 product fees on their fixed deals.

Definitely worth checking and comparing what is available in the market including intermediary deals as well (we found that a Halifax intermediary deal was the best available on our last remortgage and much better than their standard customer deals)

Other things worth factoring into the calculations include any extra interest payable for adding fees to the mortgage loan amount as well as any exit fees (Santander for example typically take a £225 exit fee).
Also what the ERC fees are if there is a chance you may want to exit early if rates were to come back down mid way through for example.
Overpayment allowances may be a consideration too which would reduce the interest applicable.

Using a mortgage comparison tool helps massively to factor in all of the above for a real cost comparison (we used Mortgage Smarty although there are no shortage of apps)

 

[kevman]

I still think we have another 1 to 1.5pc to go on the base rate over the next 12 months before we've peaked.

75bp to be added imminently.

Noises from the boe are for slow and steady. Think they are gonna rely on the gov measures and see how this affects inflation. Reckon only 50bp hike this year.....

 

[200sols]

Noises from the boe are for slow and steady. Think they are gonna rely on the gov measures and see how this affects inflation. Reckon only 50bp hike this year.....

Currency devaluation won't allow that.

 

[purplesky]

Noises from the boe are for slow and steady. Think they are gonna rely on the gov measures and see how this affects inflation. Reckon only 50bp hike this year.....

Nah. 50bp x 3 this year.
Will ultimately settle at 5% at some point over the next 12 - 18 months.

 

[Surveyor]

Renewal imminent, and looks like my options are:

3.49% with £1,990 fee (£595/month)
Or
4.14% with no fee (£626/month)

Sense check - difference is £31/month, over 5 years fix that's a total of £1,860, so not worth paying the fee for the lower rate?

Either option stings after coming off a 1.83% rate for the last 5 years

You could've locked into a deal a few months ago at a better rate.

 

[dlockers]

You could've locked into a deal a few months ago at a better rate.

If he'd bought the house in 1925 it would have been paid off now.

 

[Surveyor]

If he'd bought the house in 1925 it would have been paid off now.

Even better. He should've done that.

 

[a1ex2001]

I don't see the base rate coming down below 3.5% once it's went up meaning mortgages of 5-7% dependant on term/ltv

Mortgage rates weren’t traditionally above base rate so what we might well see if the base rate keeps going up is a return of discount rate mortgages I can remember loads of offers at base rate minus x% less than 20 years ago!

 

[Hodders]

Dilemma for us.

Interest only mortgage matures in 3 years. Currently paying 0.5% above base (2.25%)

We have the ISA savings balance to pay the mortgage off today with about 30k left over.

If our ISAs will go up by more than the interest rate over the next three years we should wait. If they don't, we should pay it off.

Guesses?

 

[Haggisman]

You could've locked into a deal a few months ago at a better rate.

Yup

Lesson learned though - I've already started the application process to lock in a rate for my next renewal in 2027

 

[Tom|Nbk]

Future dilemma for me.

Mortgage is currently at 1.54%, uber cheap payment, 134k outstanding, house values near 350k now.

Mortgage is not due until next July and the fixed is up, but by then expecting close to 5% I bet

I could 'downsize' next year and buy somewhere cash ooop north

Hmm decisions.

 

[richieboy]

Ignore this, I didn't read properly.

 

[Karl]

Dilemma for us.

Interest only mortgage matures in 3 years. Currently paying 0.5% above base (2.25%)

We have the ISA savings balance to pay the mortgage off today with about 30k left over.

If our ISAs will go up by more than the interest rate over the next three years we should wait. If they don't, we should pay it off.

Guesses?

Stocks and shares ISA, or cash ISA?

If S&S, my guess is to wait (that's what I'd do personally)

 

[dlockers]

Dilemma for us.

Interest only mortgage matures in 3 years. Currently paying 0.5% above base (2.25%)

We have the ISA savings balance to pay the mortgage off today with about 30k left over.

If our ISAs will go up by more than the interest rate over the next three years we should wait. If they don't, we should pay it off.

Guesses?

Put it all on black. Pay off mortgage and buy second house.

 

[wesimmo]

That's only going to work provided you or your wife do some "fancy accounting" and your home doesn't need to be sold to pay for retirement fees or medical bills etc.

People with no money or housing assets get their bills paid for by the tax payer but anyone with a house to sell or cash assets will be expected to pay for their own care home fees until a certain level (unless that's changed)

Worse case you need years of assisted care home support and that nest egg you were passing to your children is significantly reduced.

My parents have had it set up so that the authorities can't go after the house.

I forget the technical term, but neither owns the house entirely and it's not jointly owned, so they cannot go after the house while the other is alive. And even then, the shares in the house pass to us kids so it is still protected.

Edit

What does ‘joint tenants’ or ‘tenants in common’ mean on death?

Properties owned by 2+ people can be owned as ‘joint tenants’ or ‘tenants in common’. Here’s what the terms mean, and the legal details you need to know.

www.geoffreyleaver.com

 

[_Jimlad_]

anyone considered a 2 year variable ? just out of interest

 

[GSXRMovistar]

Question, I've still got 4 years remaining on my mortgage with a relatively smallish amount left, my current fixed term ends next month and trying to decide what to do next:-

a) Avoid fees etc and use the opportunity to just pay off the remainder of the mortgage, or
b) Pay off the bulk but setup a new term for a tiny amount just keep something in place that retains a good credit score

Thoughts?

 

[~Divine~Wind~]

Whats 2/3 year fixes are people seeing at the moment on 50/60 LTV?

 

[adam cool dude]

Whats 2/3 year fixes are people seeing at the moment on 50/60 LTV?

Not really sure my renewal is in January and we are looking around the 3% area for a 2 year fixed. That's around 35% LTV.

 

[dl8860]

Not really sure my renewal is in January and we are looking around the 3% area for a 2 year fixed. That's around 35% LTV.

Might be missing something but even with low LTV I think you'll be very luck to get 3% in January. AFAIK once you get to around 65% LTV, it doesn't help to be any lower.

Question, I've still got 4 years remaining on my mortgage with a relatively smallish amount left, my current fixed term ends next month and trying to decide what to do next:-

a) Avoid fees etc and use the opportunity to just pay off the remainder of the mortgage, or
b) Pay off the bulk but setup a new term for a tiny amount just keep something in place that retains a good credit score

Thoughts?

I think the whole credit score thing is overblown on that front. If I were you and had the funds sat in cash to pay off the mortgage instead of signing up for a new deal, I would do that for sure. It's going to be at least 3.5% really that you'll be paying, to get that cash to earn you a guaranteed 3.5% AFTER inflation at the moment is not easy at all.