To 10 year fix (mortgage)?

[413x]

I'm having a very difficult time right now in same boat. I won't go 10. And 3 isn't worth it.

I'm also thinking 5 years at basically 2.percent.

Realistically the absolute best case is a return to 1 percent ish mortgage rates. That's still only 1 percent lower.
The risk upwards is much much much higher imo.

 

[Firestar_3x]

No intent to fix this time (have done in the past 5 years then 2, if the rates start going up i'll just pay the mortgage off.

Fixing for 10 years is far to much of a bet against the market imho.

 

[Richie]

I'm in the crap position of having an ERC until Oct but also that, should I renew before then, it's likely I will be above the 60%LTV bracket.

By renewal time I will have no ERC and highly likely to be in under the 60%LTV however rates will be higher so I can only hope the lower LTV and higher rates balance out somewhat

 

[Gammawolf]

I would go fixed (Disclaimer, I did fix for 10 years in 2016 @ 2.98%). With that in mind i don't regret it one bit. I'm in control and have had 6 years hassle free, not worrying about rates, changing etc. With rates at such lows it just seems like a no brainer to me. I could get a deal now at 2.19% under the same circumstances but that would save only £21 a month on a £578 monthly outgoing. If rates have no where to go but up, then 2.19% is a bargain. With your LTV and borrow amount it seems this % is available too.

 

[dlockers]

One thing to consider is if you want to move. Now you will answer 'juzt port it'. But I'm finding it impossible to find a seller willing to sell to a buyer in a chain. So moving into rental may become mandatory for me.

 

[dlockers]

I'm in the crap position of having an ERC until Oct but also that, should I renew before then, it's likely I will be above the 60%LTV bracket.

By renewal time I will have no ERC and highly likely to be in under the 60%LTV however rates will be higher so I can only hope the lower LTV and higher rates balance out somewhat

Have you revalued your property or spoken to mortgage co to see what they value it at? I was surprised when I spoke to Nationwide that they do this automatically and I was well within a target I thought was 2 years off!

 

[Richie]

I've been basing it on sold properties identical to mine over the last few months. Over the next 6 months, a combination of a small house price increase along with 6 x payments made would get me to around 59% LTV.

If I changed before this date, I will have a £1200 ERC tagged on as well as likely bing in the 60%-75% LTV bracket.

Essentially the interest rate rises have come 6 months too soon for me to be in a position to take advantage of lower rate.

I may look into it though...

 

[413x]

I'm in the crap position of having an ERC until Oct but also that, should I renew before then, it's likely I will be above the 60%LTV bracket.

By renewal time I will have no ERC and highly likely to be in under the 60%LTV however rates will be higher so I can only hope the lower LTV and higher rates balance out somewhat

Mines Feb.
And I'm in the 60-75 bracket.
I can definitely see slipping out of that if things really tank too.
It's just that 2k hit now is not insignificant. I mean it isnt in the grand scheme. But is right now.

Keep reading that the 3 rapid hikes are over for a bit. But I don't really understand how that translates to real lender offerings.

Even if the base rate slows its rise.. Will lenders keep jacking up the rates?

 

[dlockers]

I've been basing it on sold properties identical to mine over the last few months. Over the next 6 months, a combination of a small house price increase along with 6 x payments made would get me to around 59% LTV.

If I changed before this date, I will have a £1200 ERC tagged on as well as likely bing in the 60%-75% LTV bracket.

Essentially the interest rate rises have come 6 months too soon for me to be in a position to take advantage of lower rate.

I may look into it though...

It is worth a quick call. Depending on the provider, mine was Nationwide, they had it to hand and volunteered it immediately.

 

[dlockers]

Even if the base rate slows its rise.. Will lenders keep jacking up the rates?

Likely the opposite. Still tonnes of cash in the system; lenders will eat the increase to stay competitive and win the business. With prices so high, they are quids in regardless.

Houses that were 700k here and now 825-860k in the space of 12 months; seriously.

 

[Syla5]

I would go fixed (Disclaimer, I did fix for 10 years in 2016 @ 2.98%). With that in mind i don't regret it one bit. I'm in control and have had 6 years hassle free, not worrying about rates, changing etc. With rates at such lows it just seems like a no brainer to me. I could get a deal now at 2.19% under the same circumstances but that would save only £21 a month on a £578 monthly outgoing. If rates have no where to go but up, then 2.19% is a bargain. With your LTV and borrow amount it seems this % is available too.

But for how many months would you save that £21 for? Any how much extra capital and reduce interest savings would you make because of it. Taking a monthly repayment impact view on rates is impossible to actually value the true saving/cost.

Im currently looking to borrow more for an extension at the same time as switching my current deal on to a 10 year fixed and evaluating if the ERC charges will be beneficial against a theoretically stressed mortgage where rates go up only 0.75% more within the next year.

For me switching now and taking the ERC charges vs waiting a year and being impacted by theoretical 0.75% rise works out cheaper over 10 years. However if rates rise more than 0.75%, I save £150 ish per 0.25% rise. The risk is if rates remain at similar levels as now then obviously it costs me more, again by a similar amount to what it would cost, obviously.

Worst case scenario rates remain at record lows even through inflation rises and its cost me £10k over 10 years, even then i know exactly where im at for 10 years.

 

[413x]

But for how many months would you save that £21 for? Any how much extra capital and reduce interest savings would you make because of it. Taking a monthly repayment impact view on rates is impossible to actually value the true saving/cost.

Im currently looking to borrow more for an extension at the same time as switching my current deal on to a 10 year fixed and evaluating if the ERC charges will be beneficial against a theoretically stressed mortgage where rates go up only 0.75% more within the next year.

For me switching now and taking the ERC charges vs waiting a year and being impacted by theoretical 0.75% rise works out cheaper over 10 years. However if rates rise more than 0.75%, I save £150 ish per 0.25% rise. The risk is if rates remain at similar levels as now then obviously it costs me more, again by a similar amount to what it would cost, obviously.

Worst case scenario rates remain at record lows even through inflation rises and its cost me £10k over 10 years, even then i know exactly where im at for 10 years.

It's very marginal.
Similar boat with a smaller mortgage.

Rates go up 0.75 more - no difference
Rates return stick here - better to wait
Rates go up over 1pc - better to switch right now

Most Predictions are 0.75-1.0 rise by year end (I believe)

 

[Syla5]

It's very marginal.
Similar boat with a smaller mortgage.

Rates go up 0.75 more - no difference
Rates return stick here - better to wait
Rates go up over 1pc - better to switch right now

Most Predictions are 0.75-1.0 rise by year end (I believe)

indeed and if thats by the end of this year what could it be over the next 10? even if it averages out at rates rise and stablise at 0.75% higher than now then the security of a 10 year fix now becomes a no brainer. Even if rates increase only 0.5% its still only a very marginal cost.

 

[413x]

indeed and if thats by the end of this year what could it be over the next 10? even if it averages out at rates rise and stablise at 0.75% higher than now then the security of a 10 year fix now becomes a no brainer. Even if rates increase only 0.5% its still only a very marginal cost.

10 years is too far for me. But still absolutely more risk than reward I think.

What's the lowest rates can realistically go? 0.7ish?
Thats barely 1pc down from now.
In grande scheme of paying off a mortgage that's insignificant.

But upwards limit? Isn't really one. At 5 percent I think we'd (as a country) would really be in the poo.

I can't see the come down on the horizon. But, again, reading I've come across suggestions that 2023 might be a peak? How anyone can say that I'm not sure

 

[Syla5]

10 years is too far for me. But still absolutely more risk than reward I think.

What's the lowest rates can realistically go? 0.7ish?
Thats barely 1pc down from now.
In grande scheme of paying off a mortgage that's insignificant.

But upwards limit? Isn't really one. At 5 percent I think we'd (as a country) would really be in the poo.

I can't see the come down on the horizon. But, again, reading I've come across suggestions that 2023 might be a peak? How anyone can say that I'm not sure

Considering base rate trackers seemed to bottom out at 1.15% thats the theoretical low it can go for mortgage borrowers, but ive always fixed and min 3-5 years so for me the lowest rates ive seen personally are 1.59%.

Going in to what we are now, even if things get back down to this level in the next 10 years they wont go below it because that was the lowest the BoE could go anyway, without making micro drops to base rates.

So being pragmatic about it, a 10 year fix for me at worst costs is a relative cost of 0.5% on the best ive paid in the last 10 years anyway, when i actually averaged around 1.8%.

 

[jak731]

I did a 10 year fix in 2019, 2.5% @ 75%LTV. No regrets. I set the repayment period to 30 years so the minimum payment is low (in case of any financial difficulty) but the terms allowed for unlimited over payments (with an early closure fee). So I repay about double the minimum, will have 2-3 years of payments left after the fixed term ends.

Currently wondering whether it would make more sense to set repayments down the minimum and put the spare into a stocks and shares ISA (plus take a bit to help with increased energy bills), especially now inflation is going crazy.

 

[Richie]

It is worth a quick call. Depending on the provider, mine was Nationwide, they had it to hand and volunteered it immediately.

Well blow me down...

It appears Halifax have a "Home Hub" within the app which tells you your estimated home value based on the Halifax House Price Index as well as your LTV!

Let's face it, it's highly unlikely Halifax won't use their own Halifax House Price Index to value homes

Turns out I am:

Your Loan to Value (LTV) could be around 59%

I can renew without penalty in July (3 months before fixed term ends) so I may take a look when I get home.

Appreciate the advice @dLockers

 

[Mercenary Keyboard Warrior]

Well blow me down...

It appears Halifax have a "Home Hub" within the app which tells you your estimated home value based on the Halifax House Price Index as well as your LTV!

Let's face it, it's highly unlikely Halifax won't use their own Halifax House Price Index to value homes

Turns out I am:


I can renew without penalty in July (3 months before fixed term ends) so I may take a look when I get home.

Appreciate the advice @dLockers

Thats a result congrats

 

[DanTheMan]

Doing the maths, if we could somehow guarantee 1.15% over the next ten years, it would 'only' be £50 cheaper per month. Realistically, 1.3% was about the cheapest I ever saw with our LTV.

1.86% is a figure that suits us and seems fair when it comes hedging against future rises. The erc shouldn't ever matter as our daughter is at school here for the next 7 years and we bought this due to location and long term career / life plans.

 

[Russinating]

I recently re-mortgaged and was tempted by a 10 year, but fixed for 5 instead at 1.34%. Rates will no doubt have gone up by then - possibly considerably - but I'd prefer the flexibility and option to take out equity at that point to re-invest elsewhere.