Mortgage Rate Rises

tamzzy said:
Borderline. If you can access rates of 5.1% then this is where I'd put the money rather than eating the 5% ERC
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I'm in a similar position but there is another benefit of aggressively paying down mortgage even if just breaking even with the ERC..

That cash is out of sight out of mind and not being spent on unnecessary crap.
 
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Well, it looks like things are getting better - I managed to secure a mortgage at 4.1%, 85% LTV with Santander. To be honest I was surprised and expecting much worse. It's not great by historical standards, but I suspect its the new normal for the next few years.
 
esmozz said:
Well, it looks like things are getting better - I managed to secure a mortgage at 4.1%, 85% LTV with Santander. To be honest I was surprised and expecting much worse. It's not great by historical standards, but I suspect its the new normal for the next few years.
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Where you getting 4.1? Just looked and cheapest they're offering is 4.6
 
esmozz said:
Yeah that was the one, I suspect to a degree I got lucky, but nonetheless things seem to be moving in the right direction.
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Opposite for me. I locked in 4.76 on part 1 but the best I could get on part 2 is 4.97. It isn't due until September so fingers crossed may and june bring good news...
 
I'm warming up for a move mid next year and I'm interested as to why banks are pulling rates so often and as I understand it they've been trending up a bit?

My understanding of the market is banks firstly buy money over a longer term which prices in expected trends (which I think we all agree are downward) and then compete with each other which keeps them all fairly close to each other.

So is the trend that rates will come down much slower than anticipated or that we'll see shocks or is it just uncertainty for now?
 
Got to do with swap rates and just general feeling of where BoE is going. I am hoping they do go down soon due to hopefully what looks to be a rate cut in May.

I am guessing it will only go down by . 25% though. But it will help with swap rates hopefully.
 
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TNA said:
Got to do with swap rates and just general feeling of where BoE is going. I am hoping they do down soon due to hopefully what looks to be a rate cut in May.

I am guessing it will only go down by . 25% though. But it will help with swap rates hopefully.
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It generally only ever moves that much unless the sky is caving in.
 
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matt100 said:
My understanding of the market is banks firstly buy money over a longer term which prices in expected trends (which I think we all agree are downward) and then compete with each other which keeps them all fairly close to each other.
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Gilt yields are fluctuating more than usual so you see deals being moved around a lot. Up a little since January but still down a lot since the peaks. Banks dont really buy money they create it.
 
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TNA said:
Got to do with swap rates and just general feeling of where BoE is going. I am hoping they do go down soon due to hopefully what looks to be a rate cut in May.

I am guessing it will only go down by . 25% though. But it will help with swap rates hopefully.
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You can guarantee they will pass that cut onto savers quicker than borrowers if/when it comes!
 
DB_SamX said:
I just changed my fix due in May from 5.04% to 4.64%; compared to what I expected 6 months ago, that's really good. I am not sure whether there'll be another drop by May to <4.5% but let's see.
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Just realised that I never accepted the 4.64pc offer and it's now expired, and 4.90pc is the equivalent now. Very annoyed at myself. I wonder if i accept the latter, or just go onto the variable for May when my current fix expires, assuming interest/mortgages drops in May and then i take up a fixed deal if back at 4.64pc...?

At 4.64pc, my payment would have been £946. On 4.90pc, it will be £963. Over 2 years, this adds up to £17*24 months = £408 cost of my mistake. If I roll into my variable, May would be £1,110, so £147 extra. So spend/gamble £147 to potentially save £408 if rates drop...?
 
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DB_SamX said:
Just realised that I never accepted the 4.64pc offer and it's now expired, and 4.90pc is the equivalent now. Very annoyed at myself. I wonder if i accept the latter, or just go onto the variable for May when my current fix expires, assuming interest/mortgages drops in May and then i take up a fixed deal if back at 4.64pc...?

At 4.64pc, my payment would have been £946. On 4.90pc, it will be £963. Over 2 years, this adds up to £17*24 months = £408 cost of my mistake. If I roll into my variable, May would be £1,110, so £147 extra. So spend/gamble £147 to potentially save £408 if rates drop...?
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Worth noting a lot of rate cuts are already 'priced in', if those cuts dont materialise or are later than expected mortgages rates may rise in the intervening period. But it's all a guess at the end of the day..
 
200sols said:
Worth noting a lot of rate cuts are already 'priced in', if those cuts dont materialise or are later than expected mortgages rates may rise in the intervening period. But it's all a guess at the end of the day..
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Good point; I'll mull over it and decide within next two weeks what to do. I'm leaning to just fix it to avoid the hassle for now.
 
DB_SamX said:
Just realised that I never accepted the 4.64pc offer and it's now expired, and 4.90pc is the equivalent now. Very annoyed at myself. I wonder if i accept the latter, or just go onto the variable for May when my current fix expires, assuming interest/mortgages drops in May and then i take up a fixed deal if back at 4.64pc...?

At 4.64pc, my payment would have been £946. On 4.90pc, it will be £963. Over 2 years, this adds up to £17*24 months = £408 cost of my mistake. If I roll into my variable, May would be £1,110, so £147 extra. So spend/gamble £147 to potentially save £408 if rates drop...?
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This "gamble" is a bit too precise for my liking, the fixed rates might be 4.64, they might be less, they might be more. So your saving of £408 could be £100, it could be £700 it could be anything all depends on what products are available at that point in time.

Furthermore, you can't just compare the payments to work out the 'savings'. You also need to consider the total outstanding balance at the end of the fixed term. After 2 years at 4.90% not only will you have paid £17 more a month compared to 4.64 but you will also owe the lender slightly more money (outstanding mortgage balance) because you'll have paid off less capital. It will be a pretty small difference but a common mistake I see people make is just looking at repayments over fixed term.
 
HangTime said:
This "gamble" is a bit too precise for my liking, the fixed rates might be 4.64, they might be less, they might be more. So your saving of £408 could be £100, it could be £700 it could be anything all depends on what products are available at that point in time.

Furthermore, you can't just compare the payments to work out the 'savings'. You also need to consider the total outstanding balance at the end of the fixed term. After 2 years at 4.90% not only will you have paid £17 more a month compared to 4.64 but you will also owe the lender slightly more money (outstanding mortgage balance) because you'll have paid off less capital. It will be a pretty small difference but a common mistake I see people make is just looking at repayments over fixed term.
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Yes, I know and agree; it was the closest and simple estimate I could do to get an idea.
 
Had to go through the whole assessment process again.
As I did a 10% overpayment in January they reduced my payments from £303 to £243 to keep the term the same
Entire point was to get it paid off sooner.
reassessed and agreed £395 over 7 year from £303 over 14 year. Same rate 4.49% as currently
Have to do the same next year apparently as it will happen everytime I over pay.
 
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MatsyLR said:
Had to go through the whole assessment process again.
As I did a 10% overpayment in January they reduced my payments from £303 to £243 to keep the term the same
Entire point was to get it paid off sooner.
reassessed and agreed £395 over 7 year from £303 over 14 year. Same rate 4.49% as currently
Have to do the same next year apparently as it will happen everytime I over pay.
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Who is your lender?
If its nationwide you can change the way they treat overpayments on their website. (default is adjust payments and keep term the same if overpayment >£500)
(Best is to select keep term the same and payments the same, just means your end date is not adjusted to reflect the fact you will likely pay it off earlier)
 
Mercenary Keyboard Warrior said:
Who is your lender?
If its nationwide you can change the way they treat overpayments on their website. (default is adjust payments and keep term the same if overpayment >£500)
(Best is to select keep term the same and payments the same, just means your end date is not adjusted to reflect the fact you will likely pay it off earlier)
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Halifax, they said it would happen every year.
However I'll be able to reduce to down and down every year so likely to be finished by the 5 year fix is over (my mortgage is 1 year old)
 
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