Mortgage Rate Rises

Richie said:
Yeah but @413x said he isnt overpaying as prefers to live for now hence my confusion
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He might be working out how much of the outstanding balance is left in 2027 ie. after another 3 more years of payments and saying that a 3% rate would mean his payments remain the same rather than what would happen if the rate stayed the same and the renewal was at a lower monthly amount.
 
Mercenary Keyboard Warrior said:
There was a pensions thread but the title was a little odd

There are considerations in regards mortgage vs pension that go wider than simply the basic tax position,
such as what happens if the rules change in regards pensions, they have twice in recent times (clamping down on what people could put in, and the reversing that recently)
Talk of making it taxable up front, but non taxable when paid, Gov of course like this since it pulls tax forwards
If you have high LTV you can face more issues and higher rate in regards your ongoing mortgage, plus you could in theory be in a more difficult position should the market crash
What happens if you need to take a job for less money, or you cannot work full time?

Its basically risk vs reward.

There is a mid point thats kind of balancing the risk which is to use the ISA allowance and S&S investments. Should you need the capital its at least available even should you end up having to take it when the market is on a downer (which can happen with pensions as well depending how they are invested)
Your relying on the investments generating more than your interest rate.

But its very personal and situational this stuff so you really need advice to be able to find a reasonable risk vs reward profile for you individually.
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This is a major factor imo. LTV. The main reason I am overpaying currently is to try to get down into the next LTV bracket to give myself the best opportunity for lowest rates come next remortgage. The difference can be quite significant overtime. Put it all in a pension and that doesn't come down as fast. This is less of an issue if you already reached 60% LTV or under, as rates don't get lower after that milestone I gather.

I think we had this discussion on here before. As I recall, there was not much different for me between 90% and 85%. Possibly even 80%. I think it was when you hit 75% it changed a fair bit. Can't remember now.
 
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jaybee said:
This is a major factor imo. LTV. The main reason I am overpaying currently is to try to get down into the next LTV bracket to give myself the best opportunity for lowest rates come next remortgage. The difference can be quite significant overtime. Put it all in a pension and that doesn't come down as fast. This is less of an issue if you already reached 60% LTV or under, as rates don't get lower after that milestone I gather.

I think we had this discussion on here before. As I recall, there was not much different for me between 90% and 85%. Possibly even 80%. I think it was when you hit 75% it changed a fair bit. Can't remember now.
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Generally I think they work on around 80%+ being high risk, 60-80% medium risk and below 60% as low risk.
The exact boundaries may move, but a 20% market correction is completely plausible even if its short term. Above 80% LTV and a significant market correction and you could find your offers very very poor come renewal, impossible to switch lender etc
Below 60% they are basically pretty much guaranteed that should they need to repossess then they are going to cover the outstanding debt.
Even though its a relatively narrow band, there is a really significant risk difference in 90% LTV to 60% LTV for the lender.
 
My mortgage deal is ending at the end of March, currently got a three section mortgage (don't ask why, I'm not completely sure myself....lol)

Anyway, they were all fixed for 5 years on a rate of 2.44%. Just been having a quick look at my current provider and have the following options (only look at fixed rates as that's my preference)

2 years fixed 4.89% No product fee
2 years fixed 4.64% with £995 product fee

5 years fixed 4.34% No product fee
5 years fixed 4.09% with £995 product fee

Somewhat of an improvement from the options I had back in October when I first looked when 2 year fixed (no product fee) with 6.05% and 5 year fixed (with product fee) was 5.02

I'm obviously going to have a look at other providers as well but it's certainly looking a bit brighter than it did a year ago!
 
fez said:
He might be working out how much of the outstanding balance is left in 2027 ie. after another 3 more years of payments and saying that a 3% rate would mean his payments remain the same rather than what would happen if the rate stayed the same and the renewal was at a lower monthly amount.
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This.
Paying off over 30k over 5 years just with normal repayment. So come remortgage the actual monthly payment is basically the same

That's what I plan to do. Keep the monthly repayments same and just adjust the term

Should be about 170 left after this 5 year term
 
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TNA said:
New build :eek:

Went to view a house recently that was built in 2019 and the bloody state of it put me right off touching new builds.
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Isn't that like saying you once saw a dump of an older property, and so you'll never consider touching one.

Not all "new builds" will have the same issues. Albeit lots of the big developments likely have similar issues.
 
All houses start life as new builds. Had more problems with our Victorian house than with a new build.

30% growth in valuation since 2019 doesn't sound implausible to me.
 
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Yeh i have never understood the new build hate. I've had two, and whilst neither were perfect, and there are initially quite a few bits to get sorted out, you do get it all fixed up and sorted for free. Ive made decent money on both too.

Yeh, sure there are horror stories, but then there are about anything.
 
neocon said:
Colleague of mine bought a new build (Bedfordshire ) in 2019 for 600k and today Zoopla or whatever was saying it's valued at 780k. Where in earth do they pull there valuations from? How can it possibly have gone up 180k?
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Things went a bit nuts between 2019 and 2022.

That does sound a little on the high side though. Zoopla valuations cannot really be trusted, and neither can the asking prices you see (especially at the moment).

No reason to doubt it isnt worth over 700k though considering most have gone up 20% or so.
 
ci_newman said:
The 10 year NHBC warranty covers you for major structural defects, not standard wear and tear like boiler breakdowns, roof leaks etc. You'll get the builders 2 year warranty though that covers that. Just FYI
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mate.... there's some right notorious boliers that the manufactures give away free to house builders so that they can make the money back on the parts as they keep breaking down.
 
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