Mortgage Rate Rises

dlockers said:
I'm not sure -- I thought even the trackers have a minimum term/ERC. I will check though - as the first half is due April 1st, so I only need to survive till 1st September for the next half (and hopefully by then it'll be 2% and my house will be valued higher :D)

Edit: top man, I hadn't realised the trackers didn't have ERCs. I'll still have to do some maths, but combining my products was the main reason I only went for a 2 year fix when I bought this place!
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We had whatever tracker with Nationwide, we took it out knowing we were selling as it was cheaper than any fixed terms and had no ERC. Completed last month, paid off, no charge. So definitely take a look. I could only see trackers with no ERC when looking back in August, Nationwide didn’t display any with an ERC.
 
dlockers said:
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I think I may YOLO a tracker till August -- only 0.5% higher than 5 year fixed.
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As if £74k over 2 years wasnt enough they add a £999 fee for good luck.
 
Derek W said:
Apparently I've just paid off my mortgage today. Obligatory cocaine and hookers from now until i die :p
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I found that day a real anti climax.
My lender never communicated with me after I paid the final amount, I just checked a couple of days after and my account was gone. Completely.

Then a month or so later a letter turned up from land registry saying that Nationwides interest had been removed.

It still felt good though ;)
 
Mercenary Keyboard Warrior said:
I found that day a real anti climax.
My lender never communicated with me after I paid the final amount, I just checked a couple of days after and my account was gone. Completely.

Then a month or so later a letter turned up from land registry saying that Nationwides interest had been removed.

It still felt good though ;)
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I'm just happy i've paid it off now. 11yrs and 4 months but it wasn't a huge mortgage in the first place. My mindset has now shifted to buying a plot of land and builidng my own passivhaus but that'll require a large degree of saving and it'll mean that I'll be in this house for many years to come.
 
Sometimes regret paying off my previous mortgage in good order. Within a year we'd moved to a house over twice the size with a new mortgage to go with it. It's a really lovely house but I don't enjoy owing money again.
 
dlockers said:
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I think I may YOLO a tracker till August -- only 0.5% higher than 5 year fixed.
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How does that work? We considered doing this and just leaving it on their standard tracker i.e. no contract but the rate was ~8.5%

If you want a "good" tracker you still have to sign up to a fix no?
 
fez said:
How does that work? We considered doing this and just leaving it on their standard tracker i.e. no contract but the rate was ~8.5%

If you want a "good" tracker you still have to sign up to a fix no?
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That's the Q I asked and I think it was Matt corrected me - a lot of trackers whilst 2 years have no ERC!
 
dlockers said:
That's the Q I asked and I think it was Matt corrected me - a lot of trackers whilst 2 years have no ERC!
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Good to know for the future. I think honestly it won't make that much difference to the cost over a 2 year mortgage for us as we would be paying more for those months until you change deal and then you would likely be paying a second product fee. We were also largely locked into using our current provided because I am self employed with under 3 years of records and my partner has been on maternity for the past 10 months and still hasn't quite decided how her return to work will look. Both of which make getting another mortgage hard to do.
 
EvilRob said:
How much would you save over what's remaining of the 2 yr term?
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I've got a spreadsheet calculator from someone at work, who I think got it from money-saving expert at some point, which says I'll save £1k if I pay the ERC fee and then move onto the new rate and put the money saved into the mortgage as an overpayment. I'll save about £62 going from 5.84 to 4.09 per month and putting that into the mortgage means I'll be 1k or so better off.

The only issue is if rates might drop further or in 2 years time they are a lot lower, but who knows what's going on by then, I only know I can save money now so will look at doing it ASAP I think.
 
Fixed is good for stability as in knowing what your outgoings are for a set time but can be very prohibitive if you want to change anything. I think people overly favour fixed when it isn't always the right solution.

We're currently fixed for 4 more years and it's the right thing for us at the moment but I've spent a fair bit of time on a tracker previously as it allows a lot more flexibility re moving, overpayment, etc.
 
taB said:
Fixed is good for stability as in knowing what your outgoings are for a set time but can be very prohibitive if you want to change anything. I think people overly favour fixed when it isn't always the right solution.

We're currently fixed for 4 more years and it's the right thing for us at the moment but I've spent a fair bit of time on a tracker previously as it allows a lot more flexibility re moving, overpayment, etc.
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Exactly this. Everyone’s situation is different. Fixed ain’t necessarily the right product for everyone.
 
fez said:
How does that work? We considered doing this and just leaving it on their standard tracker i.e. no contract but the rate was ~8.5%

If you want a "good" tracker you still have to sign up to a fix no?
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yeah it’s odd, I kinda looked into as I was told that a tracker may worked out better for me if I was going to gung-ho the rest of my mortgage but I saw the interest rates and quickly fixed it again.

if I was a sole trader or a contractor where my income per month could vary, it may be best to get an interest only tracker and only paid back capital on the mortgage when income for that month was past a certain amount.

It only really works in time of low interest rates and it’s what exactly my brother did to pay off his 5 houses… at one point he had three mortgages running concurrently.
 
taB said:
Fixed is good for stability as in knowing what your outgoings are for a set time but can be very prohibitive if you want to change anything. I think people overly favour fixed when it isn't always the right solution.

We're currently fixed for 4 more years and it's the right thing for us at the moment but I've spent a fair bit of time on a tracker previously as it allows a lot more flexibility re moving, overpayment, etc.
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If I had to take a mortgage now.. It'd be tracker for sure. Especially if deciding between 5 year fix and tracker.

2yr probably isn't much difference either option
 
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413x said:
If I had to take a mortgage now.. It'd be tracker for sure. Especially if deciding between 5 year fix and tracker.

2yr probably isn't much difference either option
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But there is around 1.5% difference between the two no? Do you expect 5 year to drop sub 3% in the next 12 months?
 
Nemiyen said:
I've got a spreadsheet calculator from someone at work, who I think got it from money-saving expert at some point, which says I'll save £1k if I pay the ERC fee and then move onto the new rate and put the money saved into the mortgage as an overpayment. I'll save about £62 going from 5.84 to 4.09 per month and putting that into the mortgage means I'll be 1k or so better off.

The only issue is if rates might drop further or in 2 years time they are a lot lower, but who knows what's going on by then, I only know I can save money now so will look at doing it ASAP I think.
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Personally if all I was going to save over the remaining 2 year term was £1k, I wouldn't switch to a 5 year fix at this point as rates look like they might drop a bit more. I'd wait out the rest of the 2 year term and see how things go. If rates suddenly looked like they were going to change for the worse during that period, I'd fix. If I was being ultra cautious, I'd lock in a 5 year fix rate every 6 months but not complete on it so I had the option there if I needed it and was protected from a sudden rise.
 
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Fixing in a long rate at this point is madness. In hindsight we were all done over by our brokers. Anyone in the last 5 years before the rates went up that wasn't advised by their mortgage broker to fix it for as long as possible has been given terrible advice. Mortgages were the CHEAPEST they have ever been and ever will be, they could only get marginally cheaper but exponentially more expensive (which was what happened)

I am positive 2 year fixed rates were pushed on to us to secure commission for another deal 2 years down the line, rather than fixing for 5 or 10 years to hedge against the market going up.
 
I'm hearing a lot about falling rates, but they only seem to be those with more equity exclusively.

When I've checked any prices with my current LTV rate the deals are all worse than what I've just fixed on (Mortgage renewal arranged 6 months ago)

Sounds like hype more than substance for anyone starting out
 
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