Was going to say this
I don't think in last 3 years svr has been as good as fixing?
Personally the bigger risk is variable. Especially with rises on the horizon
Basically can't get any lower than current fixes
The nervous wait to exchange....
- Thread starter noj
- Start date
Was going to say this
I don't think in last 3 years svr has been as good as fixing?
Personally the bigger risk is variable. Especially with rises on the horizon
Basically can't get any lower than current fixes
- Joined
- 14 Jun 2004
- Posts
- 17,510
- Location
- Newcastle U/T
Yeah thought fixes at a decent low rate was the best.
Sale agrees on new ace just waiting on more info from the developers of the new place as to when we can put our deposit down. Need to make sure we get the house we went before being stuck renting haha
Longer it takes riskier positiion were in regarding %
Sale agrees on new ace just waiting on more info from the developers of the new place as to when we can put our deposit down. Need to make sure we get the house we went before being stuck renting haha
Longer it takes riskier positiion were in regarding %
This is generally my thinking. We're on a 2 year fix at the mo as upsized quite substantially and I wanted fixed costs while we did the repairs, etc. No worries with a sensible variable rate with no strings attached afterwards though.
That's such a small difference for flexibility. For me the variable was always cheaper, it looks like at the moment it's a fraction more expensive. I'd still go with it as I bet a large percentage of the people who fix for 5 years end up going "wish I could exit this deal for free now" at some point. People move jobs, go travelling, change locations, get pregnant, move in with partners, get divorced etc.... and almost all of the time a fix results in them "having to wait out the remaining 3 years or pay £10k".
FWIW, people said interest rates couldn't go lower about 7-8 years ago (when I was buying my first property) and they were between 2% and 3%. They went lower, a lot lower. I think within a few years I was paying 0.74% on a variable. Wish I'd fixed on 3.5% for 5 years though.......
Last edited:
Generally speaking the times where a fix is an issue is when you buy sell your house and don’t buy another. Otherwise you can port the mortgage to the next property, take out additional borrowing and pay substantial parts of it off.
Another way at looking state current situation (with huge inflation as a result of massive amounts of quantitate easing around the globe and shortages from covid impacts) is interest rates can only really go up, the question is how much and how quickly.
Another way at looking state current situation (with huge inflation as a result of massive amounts of quantitate easing around the globe and shortages from covid impacts) is interest rates can only really go up, the question is how much and how quickly.
I don't believe your mortgage company has to allow a port, it's completely up to them. They can say no, it can be a new property they don't want to lend against. People regularly move in / out with partners and want to sell. There are hundreds of reasons why circumstances change and having a fixed mortgage can make it harder to deal with and negotiate through.
"Interest rates can only go up" has been a catchphrase for 10 years now, in which time they've gone much lower than they are now and not gone up anywhere near the speed or percentage points people have expected. What I can guarantee will happen is people fix for 5-10 years and "100%" say they don't plan on moving, changing circumstances etc.... and then in 3 years scrabble about trying to work out how to pay £10k to get out of the deal as they are getting divorced, moving in with a partner, having a career change and moving away etc....
But genuinely interest rates cannot really go any lower. From what I understand the last year was basically the lowest you can get. As in banks wouldn't lend at a lower rate.
Your right, not all lenders allow porting but that's one of the questions you ask upfront before signing up to a fix. Likewise you are correct that you would have to meet their lending criteria but in reality most mainstream lenders are petty much the same these days for normal every day applicants. If you've suddenly gone self employed in the last year or two, then good luck getting any lending anyway.
Most lenders allow the porting of mortgages and its very unlikely that they will not lend on the onward purchase unless you A) cant afford it or B) its a very unusual property, in which case you'll be SOL with all mainstream lenders anyway. I don't make financial decisions here and now on the basis that I might get divorced in the future, if your thinking you might get a divorce, its probably not a good idea to fix your mortgage and perhaps the money may be better spent lining up a family solicitor.
A £10K ERC would mean you have pretty healthy mortgage balance, an ERC is normally 1% per year and most peoples balances are just not that high unless they literally just bought the place and live in the south.
Exactly, people may have been saying it for years and it did actually start creeping up in 2018/19 before COVID hit. During COVID the rate was 0.1, it really couldn't get any lower for consumers in the retail space. Now we have massive inflation and there is a fairly clear direction of travel as has been indicated by the Bank of England to try and get it under control, that is to raise rates to soak up some of that QE they were pumping into the economy. The question is by how much and how quickly, it might be slow, it might not, that's the roll of the dice you take when deciding to fix or not.
I'm not saying you should fix or not and lots of people have done well by not fixing in a falling economy (as many did with energy prices in the early stage of the pandemic). That situation could change in the near future, it might not, I don't know but neither do you.
I think the best evidence is looking through this thread, it's filled constantly with people whose life has changed in some small way wanting to do something with their mortgage and having to deal with the "shall I pay off £x to exit or live with it / not move / rent when I don't want to / etc....." for the sake of 0.1% on current deals. I've mentioned divorce which is something nobody plans for and happens to millions each year unplanned, you've mentioned going self employeed which a larger amount of people than ever are doing. These are just 2 of the hundreds of reasons why fixing limits your options for the sake of a few quid each month.
Fixing just seems like such an odd way of doing things, people let it dictate when they should move as they feel locked into a house / mortgage deal.
I've yet to lose out financially by going on a variable deal and it's actually massively helped me as I've been able to overpay above the standard 10% of balance that nearly all fixed deals limit to you.
Soldato
- Joined
- 13 Jul 2004
- Posts
- 20,341
- Location
- Stanley Hotel, Colorado
Overpay is smart, thats another strategy. Nothing will be as cheap as just reducing the debt as soon as possible, it has compound benefits. Anything you pay off first year of a 25 year mortgage is pretty massive, even if rates were 2% forever in an ideal scenario it would still add upto +64% saved in interest
5% is the average to expect and we're nowhere close hence a fix isnt a bad consideration as it might save a lot. £100 repaid extra under that scenario would shave £338 off the total term.
We vary massively from USA where a 25yr fix is freely available apparently. In UK a quarter of the national debt is linked to inflation rates hence rises are more likely longer term imo, BOE has already moved ahead of the FED
5% is the average to expect and we're nowhere close hence a fix isnt a bad consideration as it might save a lot. £100 repaid extra under that scenario would shave £338 off the total term.
We vary massively from USA where a 25yr fix is freely available apparently. In UK a quarter of the national debt is linked to inflation rates hence rises are more likely longer term imo, BOE has already moved ahead of the FED
Soldato
- Joined
- 28 Dec 2017
- Posts
- 9,268
- Location
- Beds
Level 3 building survey came back today. As expected mostly - non standard wall construction, some movement of exterior panels where they join the load bearing wall. Nothing in awful disrepair or immediate work needed.
Also mentioned was the likelihood of retrospective cavity wall insulation being applied. There's evidence of some remedial work to the walls e.g. brick tie replacement or insulation, this being a risk to the timber frame sections.
I figure I'll pass the report to my solicitor - I guess worth asking the seller directly as well?
Also mentioned was the likelihood of retrospective cavity wall insulation being applied. There's evidence of some remedial work to the walls e.g. brick tie replacement or insulation, this being a risk to the timber frame sections.
I figure I'll pass the report to my solicitor - I guess worth asking the seller directly as well?
Soldato
- Joined
- 28 Dec 2017
- Posts
- 9,268
- Location
- Beds
You're telling me, the thing is 68 pages and it's about 70% boilerplate
But as mentioned above, you're only locked in if you split up/divorce or are selling without buying another house. We fixed for 5 years at circa 1% last year. Rates were never going lower, much more likely to go up (happening already), and because the monthly payments were only a little more than our rent previously once we've done our renovations we'd be able to start overpaying so much as to probably wipe 5 years off the mortgage at least (iirc). That's the plan anyway, we'll see what happens after the NI increase, utility prices rise, and we all start paying to commute and going on holidays again, lol
Fix low, overpay to put a dent in, remortgage at a much better LTV 5 years down the line, having shaved years off the original term.. I'm no expert but that makes more sense to me than paying an inflated interest rate for years on years and watching your monthlies go up (only way they can go).Pass on to your solicitor and then decide if there's anything in there that is actually worrying. Any red flags? Anything worth haggling over the price for? Our roof was red-flagged (original circa 120 yr/old, go into the loft and you can see daylight, not insulated etc.) which would cost £4.5k to replace. However since we were budgeting to convert the loft and we felt there were other buyers interested we didn't push them on it. Well, until it sounded like they wanted cash for the kitchen appliances! We then reminded them that there were a number of red flags on the property
Soldato
- Joined
- 28 Dec 2017
- Posts
- 9,268
- Location
- Beds
Mainly the risk to timber - they're not explicit but the report suggests cavity wall insulation and that will compromise the timber by making it damp. I'd definitely like to know if insulation was added, and potentially have a check of the timber.
Pretty much this for us too, I know the condition, and I've allowed for improvement work off my own back rather than as a bargain off the purchase price. But if there's actual structural issues now or in future I'd like to have a handle on either costs to negotiate, or whether to GTFO.However since we were budgeting to convert the loft and we felt there were other buyers interested we didn't push them on it. Well, until it sounded like they wanted cash for the kitchen appliances! We then reminded them that there were a number of red flags on the property
No selling outside MM!
A couple of years ago I might have taken you up on that, when I worked in the City I was considering getting a 2 bed flat as combination of pied-a-terre for me and renting the other bedroom out to cover costs. In the end I just couldn't justify the cost (about £350k) especially with 2nd home duty etc and just a general unease about some of the areas, you'd see flats in dodgy looking blocks in Shadwell where you'd not want to be walking around after dark etc and then newer stuff with ridiculous prices (there was some new tower on the bottom end of Whitechapel High St I used to walk past where it was like £850k for a 2 bed flat or something like that)
Yeah our place isn't too far off that price, but it's a three bed across two floors and renovated to a high standard. We priced it all wrong when we listed first, trying to sell it after we had an offer accepted on the house we bought. If I'd have known then what the house renovation would end up costing us I would have definitely dropped the asking price quicker!
It's really one of the last places skirting the City that hasn't been completely gentrified as of yet, and I doubt it will ever. It's always been home to large amounts of immigration - my family rocked up there 120+ years ago, freshly disembarked from Eastern Europe.
If we can get it onto a capital repayment mortgage in 18 months' time then we'll look to keep it for 20+ years I reckon.
Yeah it's bonkers you can literally walk 10mins from the Gherkin and be knee-deep in beggars, grotty streets and 'prison' blocks with the smell of weed coming out. I struggle to understand how the people not working in the city can afford to live there, I guess they just grew up there since the days it was a lot cheaper or are in social accommodation. I was also considering Barking as it was a cheap borough, a lot of gentrification projects and very good transport links considering how far out it is.