Mortgage Rate Rises

Caracus2k said:
Have you only just realised one of the main ways banks make money?

These sorts of sentiments are stupid.

Reminds me of all the furore over overdrafts.

The banks were prevented from charging fines for unauthorised overdrafts and so their response was just to jack up everyone's overdraft rates, including thoose with 'authorised' overdrafts, massively.

In my personal case my 'authorised' HSBC overdraft more than doubled to 40%!

Needless to say it never gets used now.
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I said earlier in this conversation that my biggest issue when they start messing with this sort of stuff is they fail to think of the consequences
Your example was perfect.

Its exactly what happens when people who have little ability to understand the commercial mindset start trying to secure votes from populism.
 
I like to think of financial services companies as operating a bunch of levers to maintain equilibrium (their profit levels). If you prevent them from moving one lever, they will understandably move a different one instead. It's not just lenders but underwriters too; you see legislation changes that impact claims costs, so the response is to adjust premiums accordingly. The more constraints they have, the more impact on pricing until a point comes where they consider it no longer profitable (e.g. you get insurers declining to quote).
 
jaybee said:
When you have a significant ERC of said 5 figures, is the idea that your new mortgage you take out you pay this charge by way of adding it on to the new amount you borrow? Or is that not possible because you need the ERC paid in order to start the new mortgage?
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We did this in 2016 when we moved over to Natwest and they added the ERC to our new mortgage with them, but it was only a few thousand (the big drop in interest rate at the time meant we'd be saving overall).
Not sure if it's still possible or worth doing though?
 
jaybee said:
When you have a significant ERC of said 5 figures, is the idea that your new mortgage you take out you pay this charge by way of adding it on to the new amount you borrow? Or is that not possible because you need the ERC paid in order to start the new mortgage?
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I'm sure you can. alternatively there's nothing to stop anyone from doing a 0% card shuffle or personal loan. It's a fairly simple set of calculations to determine whether thats sensible or not.

.. actually you might not immediately be able to do it with a card, sometimes they're weird about paying credit with credit but it wouldn't be difficult to achieve.
 
IvanDobskey said:
Paid another chunk off mine as I had accumulated savings and I keep flirting with buying expensive watches :p

Down to 19k now, so not much further to go before being mortgage free :)
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I wonder what it would feel like to have 900 a month extra?
It would help but it probably wouldn't change as much as it sounds in reality
 
Mine runs until retirement so unless anything changes I'm probably not going to appreciate the extra as I'll be on a **** pension!
 
413x said:
I wonder what it would feel like to have 900 a month extra?
It would help but it probably wouldn't change as much as it sounds in reality
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Paying off our mortgage made zero difference to how I live my life on a day to day basis. It's not like I spend more money on luxuries or whatever. It did make me feel slightly more secure however to the extent I quit my job without another one to go a few years back. Had another kid since then anyway, goodbye mortgage, hello childcare fees :)
Without kids, it would be a different situation for you, you could e.g. just say stuff it we're going on holiday on some random week outside the school holidays with no constraints, using the extra money to fund that.
 
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My mortgage will be paid off end of this year, just in time for 2nd child to go to Uni - that's where my saved mortgage payments will be going. No spare money here!
 
Have mentioned before that I managed to go mortgage free just before my 40th.

We then (the wife) bought a bigger house and so back to square one in a bigger, harder to clean space...
 
I should be mortgage free this year at the age of 48. 23 years of paying a mortgage over five places sequentially, trading up, extending the term etc. When I look at the value of the house I will own outright 15% of its value will have been from some inheritance (the bit that clears it this year), I think about 30% of it's value in there is what I've paid in paying off the capital portion of mortgages over the 23 years and 55% of its value is just the crazy housing market and increase in value of the various properties over time. I don't like to think about how much I paid in interest. :(

I really hope to keep my commitment to myself of taking the new found additional disposable income and not get used to spending it, instead ploughing it into my pension.
 
Each time you remortgage, what term do you ask for? i.e. Say you initially did a 25 year term and you come to the end of your 5 year fix. Do you then remortgage on a 20 year term or go for a 25 again to minimize monthly payment commitments being lower and then have the flexibility to overpay?
I was thinking...what would be the implications of just always asking for a really long 30 year term and overpaying each month. I guess you could then hit the maximum overpayment during a period.
 
jaybee said:
Each time you remortgage, what term do you ask for? i.e. Say you initially did a 25 year term and you come to the end of your 5 year fix. Do you then remortgage on a 20 year term or go for a 25 again to minimize monthly payment commitments being lower and then have the flexibility to overpay?
I was thinking...what would be the implications of just always asking for a really long 30 year term and overpaying each month. I guess you could then hit the maximum overpayment during a period.
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Very much depends on your circumstances.

I extended my current mortgage out with the view to overpaying monthly, however I chose a lender with no overpayment restrictions. If the **** hits the fan I can drop payments back if necessary to give a bit of breathing space.
 
jaybee said:
Each time you remortgage, what term do you ask for? i.e. Say you initially did a 25 year term and you come to the end of your 5 year fix. Do you then remortgage on a 20 year term or go for a 25 again to minimize monthly payment commitments being lower and then have the flexibility to overpay?
I was thinking...what would be the implications of just always asking for a really long 30 year term and overpaying each month. I guess you could then hit the maximum overpayment during a period.
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It's the mix of monthly commitment Vs overall cost but eventually, as I think I'm going to have with my next move/remortgage you bump into the maths of how long you're expecting to work for.

So in that case your average mainstream lender won't give you 25 years regardless of the fact that in general terms money would have inflated to borderline meaningless terms Vs your outstanding balance by the end.
 
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