Mortgage Rate Rises

[regulus]

We’re in a bit of an awkward situation where we have two small tranches left on the mortgage that’s both up for renewal in October and November, respectively.

The October tranche we were going to sell some shares to pay off, but now getting Trump’d in the stock market, I cannot see this thing improving by October. So, we’ll knuckle down and save as much as we can by October and pay off what we can and offset the rest of the loan with existing savings. Probably the wiser choice long term, but it would’ve been nice to lighten the load a bit.

The November tranche we’re going to reduce the term to two years which puts us mortgage free in November 2027.

The question is just, can I bear to wait until 2027 to be done with this thing for good. If we really stretch ourselves, we can probably do it in 12-18 months. But that’s stretching for 12-18 or cruising for 24 months.

 

[EvilRob]

The October tranche we were going to sell some shares to pay off, but now getting Trump’d in the stock market, I cannot see this thing improving by October. So, we’ll knuckle down and save as much as we can by October and pay off what we can and offset the rest of the loan with existing savings. Probably the wiser choice long term, but it would’ve been nice to lighten the load a bit.

When did you buy your shares? Things are still up year on year, I don't think I would change my strategy significantly just because of the current dip unless I had been investing very short term.

 

[regulus]

When did you buy your shares? Things are still up year on year, I don't think I would change my strategy significantly just because of the current dip unless I had been investing very short term.

Years ago. I'm still up heavily, but I'm also down a fairly high amount in real terms. Put it like this, I'm down roughly the same amount as my outstanding mortgage on the tranche I want to pay off.

Truth be told, I shouldn't be selling it anyway, but I'm impatient to get shot of the mortgage once and for all.

 

[mattyfez]

When did you buy your shares? Things are still up year on year, I don't think I would change my strategy significantly just because of the current dip unless I had been investing very short term.

Yes..theres' a very important difference between 'trading' and 'investing'...

If you fancy your chances to buy and sell shares, or currency, or whatever on a regular basis to make profit on the peaks and troughs....... it might be by the hour, or even less if you time it right, that's a trader.

Putting money into shares for the long term, and riding the waves, that's investing.

Of course if you invest, you want a diverse portfolio, maybe an ETF, so you don't have all your eggs in one basket of a very small pool of shares, or even just one company.... for example you wouldn't put all your savings into nvidia, or whatever, as if the stock takes a tumble, you'll be ruined.

So it really depends on what sort of shares you have and with whom... but also if the maths makes sense, it might make sense if they are all in USA stocks to draw some down as a stop-gap.

But also bear in mind..interest rates in the UK are not going up any time soon due to Tumps trade war on pretty much everything...so when you renew your mortagege you should get reasonable renewal rates.

It's complicated maths, as there variables and 'wild cards' in play ... there's no right or wrong answer really, especially at the moment.

 

[D.P.]

We’re in a bit of an awkward situation where we have two small tranches left on the mortgage that’s both up for renewal in October and November, respectively.

The October tranche we were going to sell some shares to pay off, but now getting Trump’d in the stock market, I cannot see this thing improving by October. So, we’ll knuckle down and save as much as we can by October and pay off what we can and offset the rest of the loan with existing savings. Probably the wiser choice long term, but it would’ve been nice to lighten the load a bit.

The November tranche we’re going to reduce the term to two years which puts us mortgage free in November 2027.

The question is just, can I bear to wait until 2027 to be done with this thing for good. If we really stretch ourselves, we can probably do it in 12-18 months. But that’s stretching for 12-18 or cruising for 24 months.

Don't let psychology get in the way of sound economic decisions. There is no problem having a mortgage for a long time, in many countries mortgages are life long and you will pass the mortgage on to your children.

Stepping back, it is simply a question of expected returns. The long term average of a diversified stock portfolio is about 7% p/a, if your mortgage rate is less than 7% you shouldn't sell any stocks.

Indeed, the smart thing to do is likely to increase the mortgage now rates are low and reinvest in stocks!

 

[jaybee]

Obviously headline/best rates are reserved for those with under 60% LTV.
But why are they also better for new purchases and worse for re-mortgages? It can't be a new customer thing as you can be a new customer with either.

 

[Tuppy_Glossop]

Obviously headline/best rates are reserved for those with under 60% LTV.
But why are they also better for new purchases and worse for re-mortgages? It can't be a new customer thing as you can be a new customer with either.

I would imagine better rates to get you into the mortgage world so they can the raise them on remortgage and increase profit

 

[Minstadave]

Obviously headline/best rates are reserved for those with under 60% LTV.
But why are they also better for new purchases and worse for re-mortgages? It can't be a new customer thing as you can be a new customer with either.

New mortgages must have a higher return, they're probably more likely to stay with the same provider for longer.

 

[FBi7]

First Direct are doing 3.99% for a 5 yr fixed. Keeping an eye on this, almost worth taking the £1300 hit on early repayment of my current mortgage (ends 31st Dec) given the uncertainty that lies ahead.

This was for 48% LTV. Looks like they've put their rates up by 0.1% to 4.09% today.

 

[EvilRob]

Years ago. I'm still up heavily, but I'm also down a fairly high amount in real terms. Put it like this, I'm down roughly the same amount as my outstanding mortgage on the tranche I want to pay off.

Truth be told, I shouldn't be selling it anyway, but I'm impatient to get shot of the mortgage once and for all.

The loss aversion psychology in humans is strong! Huge gains but because you are "down" (on paper, not in "real terms") it feels so hard to sell.
But I do agree, I think now is a good time to keep buying rather than sell. I've bought a bit more since the dip started with my end of the financial year SIPP lump sum.

 

[BongoHunter]

We’re in a bit of an awkward situation where we have two small tranches left on the mortgage that’s both up for renewal in October and November, respectively.

The October tranche we were going to sell some shares to pay off, but now getting Trump’d in the stock market, I cannot see this thing improving by October. So, we’ll knuckle down and save as much as we can by October and pay off what we can and offset the rest of the loan with existing savings. Probably the wiser choice long term, but it would’ve been nice to lighten the load a bit.

The November tranche we’re going to reduce the term to two years which puts us mortgage free in November 2027.

The question is just, can I bear to wait until 2027 to be done with this thing for good. If we really stretch ourselves, we can probably do it in 12-18 months. But that’s stretching for 12-18 or cruising for 24 months.

Now is not the time to be selling investments, I would do what you can to hold onto them and let them recover - it'll be worth it long term

 

[robj20]

Bank of Ireland has dropped already so good news for me.

2 year fix 4.88% last week, today 4.59%
5 year fix 4.89% last week, today 4.69%

The fact there's now a bigger difference between the 2 and 5 she's that mean they have less confidence in the 5 year stability?

 

[jaybee]

Bank of Ireland has dropped already so good news for me.

2 year fix 4.88% last week, today 4.59%
5 year fix 4.89% last week, today 4.69%

The fact there's now a bigger difference between the 2 and 5 she's that mean they have less confidence in the 5 year stability?

I'm at 70% LTV and all the rates I've been monitoring for the last 6 months have generally been cheaper rates with a 5 year fix.
i.e.
5 year 4.15
2 year 4.29

But then YBS suddenly dropped rates the other day to 4.07% for a 2 year for 75% LTV.

 

[Jelly4mybelly]

Bank of Ireland has dropped already so good news for me.

2 year fix 4.88% last week, today 4.59%
5 year fix 4.89% last week, today 4.69%

The fact there's now a bigger difference between the 2 and 5 she's that mean they have less confidence in the 5 year stability?

Seems high. What's the LTV?

 

[robj20]

Seems high. What's the LTV?

60% (were actually at like 38% now though)

I can get cheaper by moving away from Bank of Ireland but I really can't be bothered with all the extra paperwork. It's too easy just to click a button.

Planning on maxing out the overpayments this year as well.

 

[regulus]

Now is not the time to be selling investments, I would do what you can to hold onto them and let them recover - it'll be worth it long term

Absolutely I won't sell it now. I won't sell anything until I'm back at all-time highs again. I was just saying that the plan was to clear the mortgage by the end of this year, but not under these market conditions.

 

[slinxy]

60% (were actually at like 38% now though)

I can get cheaper by moving away from Bank of Ireland but I really can't be bothered with all the extra paperwork. It's too easy just to click a button.

Planning on maxing out the overpayments this year as well.

Have you banged in the numbers in a comparison site? For that extra 1-2 hours work.. it could save you £££.. it maybe the highest amount you get paid per hour ever?!

I had a mortgage agreed for 4.12% then swapped it for 4.01%.. yeah extra work.. two lots of paper work, two surveyors etc.. but it saved me £1000s

 

[SaBBz]

60% (were actually at like 38% now though)

I can get cheaper by moving away from Bank of Ireland but I really can't be bothered with all the extra paperwork. It's too easy just to click a button.

Planning on maxing out the overpayments this year as well.

It’s really not that difficult to remortgage. Not sure why you’re on this thread if you aren’t bothered about the rate!

 

[robj20]

It’s really not that difficult to remortgage. Not sure why you’re on this thread if you aren’t bothered about the rate!

Do I have to seak your permission to be in this thread? I am bothered by the rate, hence waiting as long as possible to see if BOI drop the rates anymore before we go on the standard rate.

Up until recently I had no idea remortgaging was basically the same process as a new mortgage. I had expected it to be similar to swapping energy company. Fill on a quick form with current mortgage details and the new company does the rest.

I have a lot going on at home that anything like this really doesn't warrant the effort, not to mention we're on UC so any savings we make are limited because they'll just pay less as well. Works best by overpaying and reducing the term.

BOI £519 a month, cheapest other option £503. That'll be reduced once the UC contribution decreases as well. Easier to cancel Disney+ to make a bigger saving. This far into our mortgage I just don't think we're going to see huge savings, it's a case of just waiting for the best BOI offer.
Two of the best deals I found also don't pay your legal fees so factoring that in means it actually costs more.

If we get another drop I'm best waiting but if we thought it was going to go up I'd be best locking in now. I may even be best going on the standard rate for a month or two if we think it'll drop again.