Mortgage Rate Rises

Martini1991 said:
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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Yep - only those with good chunks of equity are seeing any movement from what I can tell. Nationwide hasn't shifted from 4.97 for a while now at my 80% LTV.
 
lewism said:
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.
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If you couldn't figure that out under your own steam at the time then it's on you too.

I mean it our biggest outgoing. Sit down and spend some time working it out.
 
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kona786 said:
If you couldn't figure that out under your own steam at the time then it's on you too.

I mean it our biggest outgoing. Sit down and spend some time working it out.
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I could - and did - that's not my point. The fact a broker exists as a profession means that the majority of people either can't or don't understand.
 
lewism said:
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.
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My broker advised me to wait until my existing mortgage was up vs paying erc charge and refixing.
At that point rates were 1.6pc
A month later rates were 1.9 and I decided he was wrong. I refixed at 1.9 for 5 years


A few months later he called me back (close to natural renewal. I took great satisfaction in telling him I had refixed not long after our call and I was really glad I hadnt followed his advice. Would have cost over 10'000 over the period of the new fix, if I had listened

Edit.
Worse than I thought.
5 years at 1.89
Vs 5 years at 5.00

works out to nearly 20k difference! :o
 
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People seem confused on brokers.
They don't have a better crystal ball than you do.

They in effect ask you a few questions to judge your appetite on cost and security and then recommend the best based on that.
Which for most people will be whats cheapest now.

Being in finance people have long asked my opinion on mortgages. Guess what, when endowments were the big thing still I kept saying, I would take repayment (not even mentioning fix here as they were less common) but all i think ended up going with endowments.
Why? Its the same thing, the broker says endowment is cheaper so I went that way, the important bit "why would I pay more"

Had Truss not happened then I don't think we would have seen the crazy spike we did. I think it was inevitable something was going to kick inflation into gear and hence it was pretty inevitable we would have seen interest rate rises. But probably over a longer period of much lower change.

I always say to people you really need to decide between long term security vs potential savings. If all your worried about is savings then the vast majority of the time a short fix will be that. Its more risk, but over the long run normally short fixes (or maybe trackers as they phase in and out of being useful) will win out. But for some short fixes will not.
You do need to consider if you may sell up etc, but if your doing that then you aren't interested in longer fixes and hence your on to short.
 
lewism said:
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.
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This is pretty much why they are mortgage advisors and at the end of the day, you need to take their advice and decide for yourself. The other issue is they have conflicting interests. Yeah, they want to get you a great deal but they also need to feed their family so most will ALWAYS offer the upfront fee mortgages over the non fee ones because they get commission. They always say "overall cost" is better but they're just not as you would change deals at the end of it.

I fixed for 5 years as it was the cheapest mortgage I'd ever had, now I've just come out of it last year and I'm on the same rate I had for my first house in 2005 or so! If I'd fixed for 2 and then a 5 or 10 I'd be golden.

4.09 might be the cheapest they'll be in the next 5 years so a long term fix is great. I don't see why rates will drop more just because inflation is lower now because I'm sure inflation was low in 2005 to 2008 and my mortgage was way higher than 4.09. I was on the higher ltv back then (house was worth £80k!) so I don't know what the ltvs were for the lower ones but I'm thinking 4.09 is a great rate.
 
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Mercenary Keyboard Warrior said:
People seem confused on brokers.
They don't have a better crystal ball than you do.

They in effect ask you a few questions to judge your appetite on cost and security and then recommend the best based on that.
Which for most people will be whats cheapest now.

Being in finance people have long asked my opinion on mortgages. Guess what, when endowments were the big thing still I kept saying, I would take repayment (not even mentioning fix here as they were less common) but all i think ended up going with endowments.
Why? Its the same thing, the broker says endowment is cheaper so I went that way, the important bit "why would I pay more"

Had Truss not happened then I don't think we would have seen the crazy spike we did. I think it was inevitable something was going to kick inflation into gear and hence it was pretty inevitable we would have seen interest rate rises. But probably over a longer period of much lower change.

I always say to people you really need to decide between long term security vs potential savings. If all your worried about is savings then the vast majority of the time a short fix will be that. Its more risk, but over the long run normally short fixes (or maybe trackers as they phase in and out of being useful) will win out. But for some short fixes will not.
You do need to consider if you may sell up etc, but if your doing that then you aren't interested in longer fixes and hence your on to short.
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Pretty much what I realised and why ill do it on my own now. No point paying unless you really haven't a clue what to do.

I guess if you have difficult circumstances it helps?
 
I've never seen the point of mortgage advisors if you have bog-standard circumstances.
Each time I've gone gotten a remortgage, I've identified the best one I could and then gone to an advisor (out of curioisty really) and they have never found a better deal.

As alluded to above, I expect many people can't be bothered to do it themselves.
Or do some people find the process overwhelming?
 
Mercenary Keyboard Warrior said:
People seem confused on brokers.
They don't have a better crystal ball than you do.

They in effect ask you a few questions to judge your appetite on cost and security and then recommend the best based on that.
Which for most people will be whats cheapest now.
Click to expand...
Brokers can get better deals, they basically bulk buying mortage plans and if they refer enough customers to the same mortage provider a discount can occur even after the brokers commission.

The downside is that certain brokers only work with certain mortage providers or they will recommend providers that will give them the biggest commision, so it may not always be the cheapest around.

What your basically paying for is time.. it's part of their job to look at providers offering everyday so they should know which is the cheapest for the customer. It all depends how well a person knows how mortages work, how much time they are prepared to spend figuring out and how much they value their own time.

Given hindsight, I would have just paid for a broker myself. It's possible to pay a single fix fee for a broker advise for the whole of the term of a mortage. they may have advise to me to take the hit on early exiting of a mortage and to renewl before the rates hiked up. But hindsight is 20/20... and if they knew I should have known as well.

Any good mortage provider agent, will tell you the sums and which one of their particular deals is the cheapest, to pay a fee or not to, how much early repayments you can make... heck I've even had one hinted that I should shop around to find some deals on off set mortages and that they don't offer off set mortages themselves, and that I may find a cheaper deal as the lowest LTV amount they can do is 60% and it's possible to find ones at 50% and I had to just make a lump sum payment to qualify.
 
EvilRob said:
Don't recall ever having a broker advise me to go with a 2 year fix. They always just asked how long I wanted to fix for.
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Brokers can't advise they can just present facts. Chap just made a bad decision and wants to blame someone else.
 
slinxy said:
Brokers can get better deals, they basically bulk buying mortage plans and if they refer enough customers to the same mortage provider a discount can occur even after the brokers commission.

The downside is that certain brokers only work with certain mortage providers or they will recommend providers that will give them the biggest commision, so it may not always be the cheapest around.

What your basically paying for is time.. it's part of their job to look at providers offering everyday so they should know which is the cheapest for the customer. It all depends how well a person knows how mortages work, how much time they are prepared to spend figuring out and how much they value their own time.

Given hindsight, I would have just paid for a broker myself. It's possible to pay a single fix fee for a broker advise for the whole of the term of a mortage. they may have advise to me to take the hit on early exiting of a mortage and to renewl before the rates hiked up. But hindsight is 20/20... and if they knew I should have known as well.

Any good mortage provider agent, will tell you the sums and which one of their particular deals is the cheapest, to pay a fee or not to, how much early repayments you can make... heck I've even had one hinted that I should shop around to find some deals on off set mortages and that they don't offer off set mortages themselves, and that I may find a cheaper deal as the lowest LTV amount they can do is 60% and it's possible to find ones at 50% and I had to just make a lump sum payment to qualify.
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They can get better deals yes but they are very rare now, with many going direct you can get a better deal.

For people with simple requirements then there really is no need for a broker now. 20+ years ago yes, the internet like with many things means simple scenarios don't need any specialist help its all available there.

Its just like car insurance, diff brokers could give diff things (ins cos don't give all ins brokers the same terms), now buying directly from the insurer will get a better deal for the majority, with again special cases probably gaining from a broker.
OFC like mortgages not all ins cos deal directly with the public. But those that do you will almost always get as good a price from the ins co direct.

However for more complicated scenarios, self employed, restricted funds, probably I would say shared ownership etc then yes broker.

BUDFORCE said:
90% of mortgage brokers are bell ends, rob their own grandmother's for a proc fee.
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I guess you see that far more visibly than most!
 
dlockers said:
Brokers can't advise they can just present facts. Chap just made a bad decision and wants to blame someone else.
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Exactly, they are asking a few questions in order to be able to filter the 20,000 or whatever potential mortgages they could offer to you down to a list of say 5-10.
Because most brokers are not registered in order to be able to provide financial advice.
 
gort said:
I've never seen the point of mortgage advisors if you have bog-standard circumstances.
Each time I've gone gotten a remortgage, I've identified the best one I could and then gone to an advisor (out of curioisty really) and they have never found a better deal.

As alluded to above, I expect many people can't be bothered to do it themselves.
Or do some people find the process overwhelming?
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I certainly don't regret getting a broker to do. It for first time as there's so much going on with first house. But remortgage? Yeah it was no hassle and got a better deal going direct to Lloyds than the broker.
 
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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This is it: https://www.locostfireblade.co.uk/spreadsheet/Index.html
 
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