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Post by Deleted on Nov 17, 2017 9:29:15 GMT
I thought I'd have a look at what my bank (Barclays) had in the way of fixed rates, having had the colossal hike of £10 p.m. to my outgoings recently. I hadn't renewed the previous fixes because to do so would have made the mortgage more expensive. Turns out that I could fix for two years at a similar rate to the one I presently pay, but after the fix expires my variable rate would be base +3.49%, not the present base +0.95%.
No sense in pegging costs for two years only to be shafted for the remaining six or so... |
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Post by scouse on Nov 17, 2017 10:09:02 GMT
Indeed. The are going to be thousands of people who are going to get shafted by the banks as interest rates rise, either because the banks stopped cutting their Standard Variable Rates when Bank Base Rate got below 2.5% or they switched the rate from BBR +2% to BBR +4%.
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Post by PetrolEd on Nov 17, 2017 10:37:33 GMT
Got to do mine now, probably going 5 year fixed unless anyone tells me different
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Post by johnc on Nov 17, 2017 11:30:23 GMT
I fixed mine for 5 years just under a year ago when I had the feeling rates might increase. That will take me to 6mths from the end of my mortgage. Hoorah!
I fixed mine at 2.09% which wasn't the absolute best but it was with Nationwide and was (after initial problems) very easy to arrange with no fees or legal costs. |
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Post by johnc on Nov 17, 2017 11:34:07 GMT
Got to do mine now, probably going 5 year fixed unless anyone tells me different If I had a long mortgage and I could get a rate I could live with, I would be fixing for 10 years. (I could have had 2.99% for 10 years a year ago but they are now down at 2.59% or thereabouts for 60% LTV - looks a bargain to me)
All I see ahead is volatility and in my opinion, that is much more likely to lead to higher rates with almost no chance of them falling.
Purely my personal opinion and not to be construed as advice of any sort!
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Post by Deleted on Nov 17, 2017 12:27:18 GMT
Barclays fee-free rates are as follows, assuming lower than 60% LTV:
2 yrs, 1.49%.
3 yrs, 1.85%
5 yrs, 2.09%
10 yrs, 2.39%, no fee-free option.
This definitely is not a recommendation, merely indicative of how rates and term interact.
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Post by bryan on Nov 17, 2017 12:50:56 GMT
We fixed for 10 years in 2014 at 3.99% - certainly not the cheapest course of action for the last few years but I suspect we will be grateful in the later years. Our additional borrowing for the extension is 5years fix at 2.63% but is fee free so balances out against the cheapest deals out there
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Post by racingteatray on Nov 17, 2017 13:34:04 GMT
You need a pretty long-standing mortgage to have such a low SVR though.
We have a two year fix at 1.59% expiring shortly, so managed to locked in an offer fixed at 1.65% for 5yrs (<60% LTV) before the BoE raised the base rate, which will see us through to Jan 2023. It seemed the most logical thing to do - our repayments have stayed almost identical and we didn't want a 10yr fix as we didn't want to commit to owning the house for more than another 5yrs.
Only change we made was to switch to interest-only.
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Post by Alex on Nov 17, 2017 17:40:46 GMT
You need a pretty long-standing mortgage to have such a low SVR though. We have a two year fix at 1.59% expiring shortly, so managed to locked in an offer fixed at 1.65% for 5yrs (<60% LTV) before the BoE raised the base rate, which will see us through to Jan 2023. It seemed the most logical thing to do - our repayments have stayed almost identical and we didn't want a 10yr fix as we didn't want to commit to owning the house for more than another 5yrs. Only change we made was to switch to interest-only. Is it sensible to go to interest only? Surely the ongoing upsurge in house prices (which is likely to continue in London long after it stalls elsewhere in the country) means buying equity in the property over the next 5 years is a sure fire way to gain a massive return on your investment? |
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Post by cbeaks1 on Nov 17, 2017 18:30:00 GMT
No doubt the capital is being repaid or there is an investment in place to pick up the slack. You just have flexibility.
Anyway, I watch Suits, and Racing Spector will be able to pay for his house from the rolls of cash in his pockets. Probably.
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Post by racingteatray on Nov 17, 2017 18:43:53 GMT
No doubt the capital is being repaid or there is an investment in place to pick up the slack. You just have flexibility. ^^ This. We will make the capital payments in full (ie mirroring what we would pay on a repayment mortgage) but into other investments. There are any number of reasons why this is a good idea, of which flexibility in the face of uncertain Brexit-flavoured future is certainly one.
When committing to 5yrs of payments on what is a very sizeable mortgage, I personally prefer to be formally on the hook for only 1/3 of the full amount you'd pay if it was a repayment mortgage. Just in case something unexpected happens on the economic front, or we decide to rent it out (at which point you could for example scale back the capital portion to match your post-tax rental income so that it was neutral from a cost perspective).
Equally, we were very close to the 60% LTV threshold so couldn't upsize the mortgage to eg replace the windows (which needs doing reasonably soon) without going over 60% and being hit with a higher interest rate. This is another way of effectively upsizing your mortgage by building up a reserve fund that you can then access for that sort of house-related expense (obviously you need to be disciplined and not dip into it for other reasons).
Lastly, when interest rates are this low, it's possible you could earn more interest via your investments than the interest costs on the mortgage, although this is not the primary reason.
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Post by racingteatray on Nov 17, 2017 18:44:38 GMT
Anyway, I watch Suits, and Racing Spector will be able to pay for his house from the rolls of cash in his pockets. Probably. That programme is not remotely connected to the real life experience of being a lawyer in London...sadly. |
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Post by Deleted on Jan 8, 2018 22:38:46 GMT
I'm hoping to pay ours off by the end of this year if all goes to plan.
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Post by Deleted on Jan 8, 2018 23:05:14 GMT
The banks will always find new ways to shaft us, when the crash set in my bank called to say that they needed to rearrange my overdraft facility as it has to be set every twelve months despite it being the first time ever. Cue a fifty quid charge. How many HSBC customers got shafted and how many fifty quids to top up the bubbly fund? Do I trust banks? Not those with shareholders.
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Post by johnc on Jan 9, 2018 11:59:39 GMT
I know someone who is as tight as it is possible to get.
When he was at the end of his mortgage he was told it would cost £250 to get his title deeds and the mortgage cancelled. To save himself the £250 and then the £50 a year the bank wanted to safely store the title deeds, he left £50 outstanding on his mortgage and pays £1 or so in interest a year.
Too much hassle for me but I can see his point. |
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Post by Deleted on Jan 9, 2018 12:43:03 GMT
Sometimes it is just to say to the blankers, here is a finger, rotate. I got so fed up with one bank I wanted to close my account, they said to remove ALL of my money and close the account would cost £250. I left £5 in the account and ignored them from then on. If the blanks were not so full of it (no not salt) they might get more and better cooperation.
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Post by Big Blue on Jan 9, 2018 13:56:55 GMT
I know someone who is as tight as it is possible to get.
When he was at the end of his mortgage he was told it would cost £250 to get his title deeds and the mortgage cancelled. To save himself the £250 and then the £50 a year the bank wanted to safely store the title deeds, he left £50 outstanding on his mortgage and pays £1 or so in interest a year.
Too much hassle for me but I can see his point. My dad did that until he sold the family house. Then he had his for the next house and the one after that, which I now have. With my name on. |
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