Depends if he will have to pay tax on the savings interest. Also depends how long his mortgage is fixed for, it's unlikely you'll be able to get rates on savings like 5.1% much longer.
Mortgage Rate Rises
- Thread starter glenimp617
- Start date
Yes, financial situation may vary.
Soldato
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.
Caporegime
Yeah. I am seeing improvements in rates, albeit small ones.
Where you getting 4.1? Just looked and cheapest they're offering is 4.6
Caporegime
It's less then that at 60% LTV and moving home.
Also likely he applied for the 4.17% one that was up until about 2 weeks ago. My guess anyway.
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?
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?
Caporegime
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.
I am guessing it will only go down by . 25% though. But it will help with swap rates hopefully.
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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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Soldato
You can guarantee they will pass that cut onto savers quicker than borrowers if/when it comes!
Soldato
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..
Soldato
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.
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.
Soldato
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.
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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