Yeah sometimes, it's definitely worth doing, but it's incredible how close to the mark you can get by doing some simple online checks.
Mortgage Rate Rises
- Thread starter glenimp617
- Start date
Yeah it would be good if people state whether brokers did in fact get them an actual better deal. "Similar" deals mean nothing. It was better or worse surely. Is it a case of some brokers are like those comparison websites where you can find the cheapest deals, but they might be places you've never heard of with 1 star reviews?
Soldato
I’d be happy if it was the exact same rate as they do the leg work on the application chase it up etc etc while I do more important things like post here lol
Soldato
The other thing you gotta watch about brokers is that they can lie "on your behalf" which if they know what they are doing will assist things going through and you'll never know.
What can also happen is someone (like me) catches you out, then you'll get loaded up to all sorts of shared fraud prevention agencies and never get a mortgage again.
What can also happen is someone (like me) catches you out, then you'll get loaded up to all sorts of shared fraud prevention agencies and never get a mortgage again.
Don
Another noob question:
Given that I have 6 months remaining of my current rate, but the new rate is likely to be significantly higher than my current 1.79%. if I make an overpayment in the remaining term, will this cause my future payments to be lower rather than shortening the term?
(Also how can I calculate what my monthly payments will be after taking this into account?)
From what I can tell it should based on this:
Given that I have 6 months remaining of my current rate, but the new rate is likely to be significantly higher than my current 1.79%. if I make an overpayment in the remaining term, will this cause my future payments to be lower rather than shortening the term?
(Also how can I calculate what my monthly payments will be after taking this into account?)
From what I can tell it should based on this:
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With Nationwide you can ask them (if over £500) to reduce payments or reduce term. Unless it is a substantial amount, there won't be much movement in monthly.
With only 6 months to go, it won't make much of a difference either way. But if asked you need to pick reduce remaining term. This reduces the balance owed and there for more of your monthly payment goes to repayment and less to interest which in turn reduces repayment term.
But to be honest if you have a savings account that offers over 1.79% you can just leave it there and when the time comes just bang it in in one go.
depends on how much work you feel like doing and how much money is going into the overpayment
the best easy access is ~4.5% vs your current 1.8%, so a 2.7% difference
say you have £10k for that 6 months, that's ~£180 extra (which you would earn in interest in the savings account over simply just chucking the cash into the overpayment) that you can plough into the principle at the end of your current mortgage
the sums are very marginal at 6 months but if you're prepared to spend 30 mins of your time there's some money to be gained there
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Don
My current payments are ~£340/month with ~£71k remaining on my mortgage (small fry compared to most here I know). Initial look at renewal was putting monthly payments at £430 or thereabouts.
I have ~£2k sat in my current account not earning any interest, so was potentially going to use that as a lump sum overpayment, hoping that would bring the new payments down slightly come renewal time?
£2k is 3% of principle so if maths works approx £417mo instead of £430.
if you chuck the £2k in now or at the end of your current mortgage, it will bring the repayments for the new mortgage down for sure
the devil is whether you want to do it right now, or at the last minute to maximise the current differential between your mortgage rate and savings rate
for £2k x 6 months: if you chuck this into an easy access account you'd have ~£36 extra in interest (that you can lump into the overpayment at the end of the current mortgage) vs overypaying the £2k into your mortgage right now
whether that £36 is worth it to you...is up to you
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Don
Just moved (and a bit more) to my ISA - makes sense but easily overlooked (had way more in my current account than needed, even after putting a little into my ISA and Kids savings accounts each month).
Soldato
Fed up of renting, we've applied for our first mortgage, but we are getting nowhere near the rates being mentioned above. We are in a lower cost area of the country where the house we are looking at is 140k. Im being quoted 5.8% from todays price drop through Barclays with a monthly of £856 fixed. The broker we are with is pushing us towards a 2 year fixed rather than 5 year, but after the fixed term ends, it goes up to £1067 with a total repayable being £302.5k
What would be the best plan? Take the 2 year but over pay, then get another mortgage at the end of 2 years and hope the rate is lower? Is the aim to keep jumping mortgage to mortgage like swapping credit cards? We are pretty new to this, even though we are older, so just need unbiased advice if you could please.
What would be the best plan? Take the 2 year but over pay, then get another mortgage at the end of 2 years and hope the rate is lower? Is the aim to keep jumping mortgage to mortgage like swapping credit cards? We are pretty new to this, even though we are older, so just need unbiased advice if you could please.
Don
As a relative noobie myself then yes, as soon as your fixed term expires or is about to expire then you shop around for another fixed term deal rather than reverting to the SVR (standard variable rate) which is likely hideously expensive.
The question realty is how long to fix for, which you can only decide by guessing what will happen with interest rates. It's unlikely they will rise so personally I'd be looking at a shorter term, but normally 5 year has slightly better rates than a 2 year term (at the risk you're then locked in for a while if interest rates fall significantly in say a years time)
What is the ltv you’re looking at? Seems a sound plan as you say, then when the two year fixed is up remortgage at a hopefully more favourable rate due to interest decreases and better ltv
basically yes. It’s normal to move onto the standard variable interest rate when outside of a fixed deal, this is substantially higher than what you’d get under a fix.
You’ll also benefit from lower loan to value as the house price increases and the mortgage balance decreases each time you remortgage.
It basically comes down to balancing risk vs certainly when it comes to length of fix.
Soldato
- Joined
- 24 Sep 2007
- Posts
- 5,149
Every time you get a remortgage deal, you are going to have to pay more fees, so jumping is not without its costs.
Essentially with a mortgage you need to take a view on the long term direction of interest rates. If you have time it would be a good idea to start following some financial commentators, so you are more clued up on which way interest rates might go. I can tell you that interest rates are still historically quite low. You have to balance taking risks on interest rate calls vs having certainty on what your payments will be for a given time.
Soldato
Thank you alll. I was a bit cautious about picking the 2 year over the 5 year, does anyone thing they will go much lower? is total repayable for a mortgage really over 200% initial mortgage? I know the house value will go up, but I doubt by that much. Is the high interest rate Im being quoted because of the 95% ltv? I guess a bigger deposit is needed? Also, how much to overpay by? Whhat would be a worthwhile figure?