Mortgage Rate Rises
- Thread starter glenimp617
- Start date
Caporegime
When you upsize you port over your existing mortgage - you just keep paying that as normal but it's attached to the new property, you then take an additional mortgage to make up the shortfall on the new house price.
Not all mortgages are portable though.
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Soldato
As we have moved over the years and taken additional lending for home.improbements the terms haven't aligned so have ended up with additional lending under the head mortgage
In basic terms you might 're mortgage' when a fixed term comes to an end so you'd still only have one mortgage, but with a new supplier who offers better rates.
But in the meantime you might realise that your house has gone up in value by X percent, so you could take out a new loan (2nd mortgage) on the theoretical profit you have made, maybe to reinvest or to pay for a kitchen refurb or an extension or whatever.
But it's risky as you are basically taking out a 2nd mortgage/loan against theoretical increase in your house value...
So it can get quite messy quite quickly unless you really know what you are doing.
It's substantially more likely you'd end up there by having a portable mortgage and moving house mid term. Rather than paying an ETF you just take out a separate mortgage for the difference but they have different end dates.
If you never cough the ETF or lapse onto SVR on one or more you'll always have multiple mortgages.
If you never cough the ETF or lapse onto SVR on one or more you'll always have multiple mortgages.
Soldato
We recently had a meeting with a financial advisor and discussed our mortgage(s) and options around paying off / part paying off / not / other options.
He said the general consensus is that rates will drop again and any money to potentially part / pay off the mortgage(s) is probably better invested until the end of the term as interest on the investment would be greater that the interest paid on the mortgage (also need to consider the early repayment fees)
He said the general consensus is that rates will drop again and any money to potentially part / pay off the mortgage(s) is probably better invested until the end of the term as interest on the investment would be greater that the interest paid on the mortgage (also need to consider the early repayment fees)
Caporegime
Seems sensible to me, we've got enough savings to pay off our mortgage which is fixed at 3.5% but it's all tucked up is ISAs earning more.
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Did he say invested or in savings? Be careful investing if you need the cash at the end of the mortgage term.
Soldato
Invested - we have given him all the details and waiting on him coming back with a pension / retirement projection and options around investment(s)
Soldato
That's a good position to be in
Just noting he said 'interest' which implies savings or bonds rather than anything else. Anyway the point still stands.
Soldato
Same position here, 3 years 10 months until our fixed term ends* and the money to pay off the remainder is sat here waiting.
*Not that I'm counting or anything
1.7pc inflation. Crazy!
Unfortunately the important parts like food are still high.
But yes. I'm expecting at least a 0.25 drop.
Personally I'd prefer consistent 0.25 point drops than a 0.5 then a pause.
If this is the new norm (big if) then I'd be expecting not hoping for a sub 3pc rate for sure come renewal.
Obviously too far off to even think about.
Unfortunately the important parts like food are still high.
But yes. I'm expecting at least a 0.25 drop.
Personally I'd prefer consistent 0.25 point drops than a 0.5 then a pause.
If this is the new norm (big if) then I'd be expecting not hoping for a sub 3pc rate for sure come renewal.
Obviously too far off to even think about.
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Caporegime
It won't last, 2 kids now in private school and my wife wants a bigger house. We will be back in debt shortly.That's a good position to be in
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Soldato
I expect we will see a 0.25% cut, the committee are notoriously cautious, they raised rates at a snails pace so I expect them to fall similarly slowly they will want to see the lower rates maintained following the budget I'm sure before possibly another 0.25% drop in December.
I managed to hold out for a year after we cleared our perfectly nice 3 bed house. Often wish I'd been more stubborn about moving - more house more stuff...
I do feel lucky in that I don't have the desire to live in a big house.
It comes from my upbringing I think living in a flat huge house with a huge maintained garden.
It was just work, work, work. There was always something to do. Something needed cleaning. Grass needed cutting.
Basically became a slave to the house.
I'm happy with a small 3 bed detached have now. With both of us WFH it would be nice to have another bedroom. But absolutely not needed.
Soldato
- Joined
- 19 Oct 2010
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The 4.22 / 5 years / no fees with Natwest my broker has locked in has now raised to 4.31. So that's certainly bucking the continual faling trend.