Mortgage Rate Rises

Mortgage Brokers remit is literally to find the “best” deal. dont know if there is remit for them to give you financial planning advice. But in all fairness even if they do, advice is advice, it is upto you to evaluate and take or reject such advice.

Fixing rate at the peak for a long term isn't the soundest idea.

Similarly fixing cheapest rate in the market for 2yrs only with the context that inflation is going out of control isn’t sound advice either.
 
pc-guy said:
Mortgage Brokers remit is literally to find the “best” deal. dont know if there is remit for them to give you financial planning advice. But in all fairness even if they do, advice is advice, it is upto you to evaluate and take or reject such advice.

Fixing rate at the peak for a long term isn't the soundest idea.

Similarly fixing cheapest rate in the market for 2yrs only with the context that inflation is going out of control isn’t sound advice either.
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You don't have to tell me, or my mate. We all know the game. One can only do their due diligence in researching the current conditions/market, and make what you feel is the best decision at the time. This particular time probably a combination of not the best move plus a bit unlucky. I mean we are talking damage in the immediate upcoming months yes, but I mean Putin might do something crazy tomorrow and we go up to 8%.
 
matt100 said:
I suppose it's a slight side point but why did he do that? Nobody is forcing anyone to fix for 5 years?

Also if he's currently at 5% I suspect the 3.89% mortgages which are for under 60% LTV and the best borrowers wouldn't be available to him anyway.

But it sounds like he just made a bad call on the term.. that said 1% isn't THAT much, he's likely best letting it run whilst the delta to the best deal isn't that high whilst the ERC will be painful, there'll be a crossover at some point.

Bearing in mind this isn't costing him "more" he can afford it which is how he's got it, it's just not the "best" deal.. Reminds me of a million years ago when I used to sell phones and people would tell me they wanted to change because their phone was getting a bit heavy. I was dying to tell them it hadn't gained weight.

Anyway, even on my £450k mortgage 1 whole percentage point is only £200 a month. When we get into fretting about less than that it's really going to drive you mad for nothing.
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200 Month is quite a lot really.
I know it's relative. But it's still a lot!

That's a nice holiday gone.
 
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413x said:
200 Month is quite a lot really.
I know it's relative. But it's still a lot!

That's a nice holiday gone.
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totally but thats what you'd save is my point, having the mortgage means you should be able to afford it at the rate agreed. So painful but he's lost nothing, he's just not gained it.

Spare a thought for those of us (me) who will eventually (18 months) come off their not to be repeated deal (2.39%).. I'm planning to obfuscate the whole thing by moving.
 
matt100 said:
Anyway, even on my £450k mortgage 1 whole percentage point is only £200 a month. When we get into fretting about less than that it's really going to drive you mad for nothing.
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How so? 1% of £450k is £4.5k per year.

ETA: I have to admit I have brain farted the impact of interest rate on the monthly payment in the past.
 
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pc-guy said:
Mortgage Brokers remit is literally to find the “best” deal. dont know if there is remit for them to give you financial planning advice. But in all fairness even if they do, advice is advice, it is upto you to evaluate and take or reject such advice.

Fixing rate at the peak for a long term isn't the soundest idea.

Similarly fixing cheapest rate in the market for 2yrs only with the context that inflation is going out of control isn’t sound advice either.
Click to expand...

It us only a bad deal if it looks bad in hindsight. Rates can go up as well as down, it could still be a good deal.
 
jaybee said:
You don't have to tell me, or my mate. We all know the game. One can only do their due diligence in researching the current conditions/market, and make what you feel is the best decision at the time. This particular time probably a combination of not the best move plus a bit unlucky. I mean we are talking damage in the immediate upcoming months yes, but I mean Putin might do something crazy tomorrow and we go up to 8%.
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That’s true.
 
BUDFORCE said:
Yea best deal for them.
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i have generally not been disappointed by using a broker. Only exception was my first mortgage. It was a broker recommended through a family friend.

With hindsight, I should have gone to the market. Basically didn’t do my homework. But this is before the days of comparison website with easily accessible, transparent and comparable deals. I literally had to visit banks and different brokers to inquire about rates and deals. Also some of those apparently count towards credit checks which impacted on credit ratings at the time.

I definitely don’t miss those old days of opaque being fleeced left, right and Center. With a market now offering so much more information at a consumers finger tip. It is much much harder to be fleeced by a broker in all fairness. They get found out pretty quickly.
 
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EvilRob said:
How so? 1% of £450k is £4.5k per year.

ETA: I have to admit I have brain farted the impact of interest rate on the monthly payment in the past.
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Yeah you're wrong. That's not how it works, put it into a repayment calculator. £450k over 25 years each 1% equals roughly £200 per month.
 
matt100 said:
Yeah you're wrong. That's not how it works, put it into a repayment calculator. £450k over 25 years each 1% equals roughly £200 per month.
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About £260 on a 25 year mortgage. Probably due to front loading more interest, ******* away £4.5k extra a year at the beginning and paying less off the capital than a lower rate but not having to pay as much interest as the balance goes down later. Affordability is important but it's a lot of money that will have a significant impact on net worth over a few years.
 
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Mysterae_ said:
I know what you mean but it's a bit spooky that you mention 15 years when that was when the housing market last crashed :eek:.

Who are you and what do you know? :D
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I always love talk of the great house price crash in 2008 when you look at the graph is was a short term blip and if you drill down from the national figures quite a lot of areas had a plateau not even a dip. This latest crash is still only lopping off the CoVID boost and I’ve yet to be convinced it will result in any meaningful drop in prices, the current fall combined with higher rates hasn’t made houses more affordable!
 
matt100 said:
Yeah you're wrong. That's not how it works, put it into a repayment calculator. £450k over 25 years each 1% equals roughly £200 per month.
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For your fixed period of say 2 years, you’d be paying approximately £4.5k per year more (less a bit due to repayments) than you would if the interest rate was 1% lower.

Comparing it over 25 years it will be ‘only’ £200 per month or so but that’s because the amount outstanding won’t be near £450k for the whole 25 years, it’d be roughly half that. Very unlikely you’d be fixing for 25 years though.
 
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