Re-mortgage now or wait?
Discussion
DonkeyApple said:
Caddyshack said:
DonkeyApple said:
Why wait 5 years for the next chance to get some fees when you can settle on 2? 
Not every 'advisor' in any FCA field is kosher. I'm sure the opportunity to bring forward the next few opportunity weighs heavier on some than others.
I think you would be shocked at how few brokers are actually like that. In 25 yrs I have met very few.Not every 'advisor' in any FCA field is kosher. I'm sure the opportunity to bring forward the next few opportunity weighs heavier on some than others.
The compliance is very strict and they look for trends - it shows up as a red flag if an advisor does lots of anything in a pattern and the FCA are very hot on 2 yr repetition.
There will be more on the fiddle that you would like to believe. There always is in the retail space, hence why there is so much focus on regulating them and all the new regulatory additions over the last decade to try and reign in the worst but we all know that within our own little segments there are still operators both corporate and individual who just can't resist the quick Buck.
Our group is a PLC and that draws attention - they often swoop in with a themed visit - recent ones have been "staged income" where they loom for people who started a well paid job 3 months before mortgage application. Others have been 2 yr fixed rate repetition and scheme abuse such as people obtaining buy to let mortgages to borrow more and then move in.
The regulator carries a big stick and we have a rule that if an advisor is deleted from any lender panel then they are out the door. I have seen good advisors booted out for quite minor things.
The more business you produce the more attention is focussed on us. I had a frustrating run of mystery shoppers as I had done a lot of business with Santander - it was annoying as it wasted so much time that I would not get paid for.
Our deal is up next month, I forget the current/proposed rates but we are currently on a 5yr fix with Natwest, having compared the market we are staying put with them and doing a product transfer (rate was locked in a couple of weeks ago) which means our repayments are going from £1056 to £1283 a month.
Or as I look at it, over £200 a month extra for (at least) another five years because Kwasi Kwarteng and Liz Truss FUBAR'd the economy during their ridiculously short tenure in government, Absolutely great.
I understand that global world events would have let to some interest rate rises to control inflation, but not the ones we have seen since those utter f
kwits were let lose at the helm. I'm unimpressed to say the very least.
My broker, who is a mate, is recommending a 5yr fix again, and says that is what most people are favouring. I'm not so comfortable, would have favoured a 2yr fix this time round, but I don't see the Ukraine war ending any time soon as Vlad will have to be seen to win, the associated energy-related cost of living crisis will just run and run, labour shortages will mean higher wages required to get people into work, further cost-push inflation, with further rate rises to quell that.
The Tories are a busted flush for the next election, regardless of their policies, they've just hit that wall of several terms and the public will (I think) want a change to Labour at the next GE, even though Keith doesn't seem to be the best candidate, it is his opportunity to lose.
So, lots of instability, not sure where rates are going, I feel it best to suck up the 5yr fix and try my best to negotiate a rise on my day rate at year end (I freelance on an annual contract).
Meh!
Or as I look at it, over £200 a month extra for (at least) another five years because Kwasi Kwarteng and Liz Truss FUBAR'd the economy during their ridiculously short tenure in government, Absolutely great.
I understand that global world events would have let to some interest rate rises to control inflation, but not the ones we have seen since those utter f
kwits were let lose at the helm. I'm unimpressed to say the very least. My broker, who is a mate, is recommending a 5yr fix again, and says that is what most people are favouring. I'm not so comfortable, would have favoured a 2yr fix this time round, but I don't see the Ukraine war ending any time soon as Vlad will have to be seen to win, the associated energy-related cost of living crisis will just run and run, labour shortages will mean higher wages required to get people into work, further cost-push inflation, with further rate rises to quell that.
The Tories are a busted flush for the next election, regardless of their policies, they've just hit that wall of several terms and the public will (I think) want a change to Labour at the next GE, even though Keith doesn't seem to be the best candidate, it is his opportunity to lose.
So, lots of instability, not sure where rates are going, I feel it best to suck up the 5yr fix and try my best to negotiate a rise on my day rate at year end (I freelance on an annual contract).
Meh!
Sarnie said:
DonkeyApple said:
Why wait 5 years for the next chance to get some fees when you can settle on 2?
Not every 'advisor' in any FCA field is kosher. I'm sure the opportunity to bring forward the next few opportunity weighs heavier on some than others.
These are usually the ones that come and go.Not every 'advisor' in any FCA field is kosher. I'm sure the opportunity to bring forward the next few opportunity weighs heavier on some than others.
But, there can be plenty of reasons to advise a client to take a two year rate, where they are stating they'd prefer a five year rate. They could have told you they may move home in a few years or come into funds that could pay the mortgage off.
As an advisor, you collect all the information, provide the client with that they think they want along with an alternative product that you may think is better for them, along with an explanation why and then you allow them then to allow them to make an informed decision. If they go with their own preference then you just document the conversation and that you advised otherwise but they wanted to go with XYZ. It also helps when a client isn't happy in two years time when they want to pay their mortgage off after coming into an inheritence and aren't happy with the ERC's they are being charged to redeem the mortgage, the audit trail of advice is there.
Anyone purely advising a client to take a shorter rate just to be able to earn commission sooner isn't going to last long, the compliance is far too rigid for that pattern to not become pretty obvious, pretty quickly......
We have the ability to do additional borrowing with the lender which should mean that even during the 5 year term we wouldnt be stuck.
But if the worst should happen, we could potentially wait as much as 5 years for a move. Or even 4 years and pay the lower rate of ERC, which would cost less than the additional interest we would have been paying on a 2 year fix term.
Last month I viewed a couple of houses with the aim to move this summer, whilst increasing my current mortgage by £100k-ish to move into something bigger and a better location. Extremely tempted to knock it all on the head as really don’t like the idea of sticking a considerable sum of money on a new mortgage interest rate of 4-5%….. I’m currently on 1.8% which ends in April 2024. I can port it but any extra borrowing goes on the new rate, then when April comes round that lot will all go on the higher rate too or whatever it is at the time. Ugh.
Caddyshack said:
Deesee said:
BOE up to 4.5% today, I think we will see 5% by August.
What is the theory behind the 5% prediction? Not arguing...just interested.Caddyshack said:
Deesee said:
BOE up to 4.5% today, I think we will see 5% by August.
What is the theory behind the 5% prediction? Not arguing...just interested.REAL inflation, home fuel, food is well over the 10% they are quoting. if they really want to get a grip on inflation gov/eu policy on fossil fuels and farming will need to take a step back in time (shame). Note today all EU laws will be removed from UK law by end 2023.
Today, 1 yr Swap is 4.7%, we are at 4.5% BoE today, 2 yr Swap 4.4%, so there will continue to be an upward curve in the short term, 4.9/5.0% is priced in presently for the summer/autumn, markets are not normally out by much
However..
Money Printing, QE in 2021 was too strong & bonds oversold at a discount, theres still too much excess covid cash floating in the system.
Last time a period of relatively low interest rates (2% after the depression) they raised to around 7% after a simular period in time to the last 15 yrs.
Nb, Death by a thousand cuts (0.25%) a month is not working the way it was probably intended, should have perhaps been larger 0.75/1% jumps.
I gave an initial take for a tracker when this thread started, now id be looking at longer term fixes now (5-10yrs). Granted I work in commercial space not owner occupied residential space.
Deesee said:
Caddyshack said:
Deesee said:
BOE up to 4.5% today, I think we will see 5% by August.
What is the theory behind the 5% prediction? Not arguing...just interested.REAL inflation, home fuel, food is well over the 10% they are quoting. if they really want to get a grip on inflation gov/eu policy on fossil fuels and farming will need to take a step back in time (shame). Note today all EU laws will be removed from UK law by end 2023.
Today, 1 yr Swap is 4.7%, we are at 4.5% BoE today, 2 yr Swap 4.4%, so there will continue to be an upward curve in the short term, 4.9/5.0% is priced in presently for the summer/autumn, markets are not normally out by much
However..
Money Printing, QE in 2021 was too strong & bonds oversold at a discount, theres still too much excess covid cash floating in the system.
Last time a period of relatively low interest rates (2% after the depression) they raised to around 7% after a simular period in time to the last 15 yrs.
Nb, Death by a thousand cuts (0.25%) a month is not working the way it was probably intended, should have perhaps been larger 0.75/1% jumps.
I gave an initial take for a tracker when this thread started, now id be looking at longer term fixes now (5-10yrs). Granted I work in commercial space not owner occupied residential space.
Trouble is that it depends which bit of the economy you look at. Plenty of boys are racing away and 25bp here and there are of zero relevance for getting people to slow spending. When you look at the part of the economy where people are actually struggling, 25bp is of zero relevance as they're paying junk debt rates and 25bp is like firing a marble up Katie Price, not going to be noticed.
Food and clothing appear to be the sticky inflation issues. To me that sounds like an import cost issue so a GBP v one so I can see why adding quarter points to keep the pound from weakening is good but if the economy is stronger than expected then that could be self solving.
In reality, in a country that is dominated by consumer borrowing it's hard to see the relevance of the BofE today when it's the FCA that completely controls how much anyone spends, when they spend it and where. You can even use the FCA to steer balance of payment changes such is the feature and dominance of FCA regulated lending products in society.
The only place you can see BoE still being dominant onshore is the housing market. Raising interest rates does take steam out of the buying market but the flipside is that you're probably spiking the rental market higher and that's the section of society that doesn't need it's spending reigned in as it's been hammered by fuel and food costs etc.
It's genuinely difficult to see the relevance.
Food and clothing appear to be the sticky inflation issues. To me that sounds like an import cost issue so a GBP v one so I can see why adding quarter points to keep the pound from weakening is good but if the economy is stronger than expected then that could be self solving.
In reality, in a country that is dominated by consumer borrowing it's hard to see the relevance of the BofE today when it's the FCA that completely controls how much anyone spends, when they spend it and where. You can even use the FCA to steer balance of payment changes such is the feature and dominance of FCA regulated lending products in society.
The only place you can see BoE still being dominant onshore is the housing market. Raising interest rates does take steam out of the buying market but the flipside is that you're probably spiking the rental market higher and that's the section of society that doesn't need it's spending reigned in as it's been hammered by fuel and food costs etc.
It's genuinely difficult to see the relevance.
Boo-urns said:
Prohibiting said:
Last month I viewed a couple of houses with the aim to move this summer, whilst increasing my current mortgage by £100k-ish to move into something bigger and a better location. Extremely tempted to knock it all on the head as really don’t like the idea of sticking a considerable sum of money on a new mortgage interest rate of 4-5%….. I’m currently on 1.8% which ends in April 2024. I can port it but any extra borrowing goes on the new rate, then when April comes round that lot will all go on the higher rate too or whatever it is at the time. Ugh.
Word for word my situation at the moment, except our fix ends in June 2024.The property market near me seems to have stagnated too. We had a few viewings when we initially put it on the market a month ago but nothing now for about three weeks. Perhaps we're asking too much, but we listed it at less than the recommended price given to us by the agents (we got similar figures from three) and still nothing.
We have accepted an offer on our current place, and had an offer accepted on a new house with a mortgage (current +£140k) in place at 4.04%, due to expire towards the end of September.
Chain not yet complete and a small part of me kind of wants to stay put to keep an increased financial buffer. We really do need another bedroom though.
Caddyshack said:
Thanks for explaining. It will be interesting to see what happens. I think the govt. haven’t realised quite how hard the brakes are on in the economy and the skidding halt will show itself soon…how that affects inflation is another matter.
Interesting point, the risk of a recession apparently went away today 
that would have defiantly sorted out inflation 
People working from home/hybrid, more time on hands, more cash in pocket.. Plenty more people not working (see the government trying to entice the over 50s+ back to work, because they 'think' they have adequate income/cash). Large swaths of the workforce on in work benefits..
For an SME (like myself), its never been tougher, big corps it seems to be becoming easier, heh ho!
Prohibiting said:
Last month I viewed a couple of houses with the aim to move this summer, whilst increasing my current mortgage by £100k-ish to move into something bigger and a better location. Extremely tempted to knock it all on the head as really don’t like the idea of sticking a considerable sum of money on a new mortgage interest rate of 4-5%….. I’m currently on 1.8% which ends in April 2024. I can port it but any extra borrowing goes on the new rate, then when April comes round that lot will all go on the higher rate too or whatever it is at the time. Ugh.
That was our thoughts too. We started viewing houses at the beginning of the year. Our current rate is 1%. We would be taking out additional borrowing of £120k-ish to get anywhere we would consider moving to and with the lack of properties available we are knocking it on the head.
BlindedByTheLights said:
Caddyshack said:
Deesee said:
BOE up to 4.5% today, I think we will see 5% by August.
What is the theory behind the 5% prediction? Not arguing...just interested.Tagteam said:
BlindedByTheLights said:
Caddyshack said:
Deesee said:
BOE up to 4.5% today, I think we will see 5% by August.
What is the theory behind the 5% prediction? Not arguing...just interested.I know the UK isn't the USA, but their inflation is now becoming embedded.
Fuel/energy costs and supply shocks triggered this mess, but now it's become embedded it won't go away without rates above the inflation rate (real)
We'll be lucky with 6% peak rates.
pti said:
Boo-urns said:
Prohibiting said:
Last month I viewed a couple of houses with the aim to move this summer, whilst increasing my current mortgage by £100k-ish to move into something bigger and a better location. Extremely tempted to knock it all on the head as really don’t like the idea of sticking a considerable sum of money on a new mortgage interest rate of 4-5%….. I’m currently on 1.8% which ends in April 2024. I can port it but any extra borrowing goes on the new rate, then when April comes round that lot will all go on the higher rate too or whatever it is at the time. Ugh.
Word for word my situation at the moment, except our fix ends in June 2024.The property market near me seems to have stagnated too. We had a few viewings when we initially put it on the market a month ago but nothing now for about three weeks. Perhaps we're asking too much, but we listed it at less than the recommended price given to us by the agents (we got similar figures from three) and still nothing.
We have accepted an offer on our current place, and had an offer accepted on a new house with a mortgage (current +£140k) in place at 4.04%, due to expire towards the end of September.
Chain not yet complete and a small part of me kind of wants to stay put to keep an increased financial buffer. We really do need another bedroom though.
Nemophilist said:
That was our thoughts too. We started viewing houses at the beginning of the year.
Our current rate is 1%. We would be taking out additional borrowing of £120k-ish to get anywhere we would consider moving to and with the lack of properties available we are knocking it on the head.
Really interesting comments. The only reason I want to move is for a garage in all honesty and perhaps a slightly better location. Girlfriend is happy to stay put and we’re comfortable in our humble 3 bed semi. It’s looking more and more likely that we’ll knock a potential move on the head as we hate stretching ourselves (we enjoy our holidays too much). A bigger mortgage on a much higher rate is just going to really grate. Maybe reevaluate in a couple of years…. Our current rate is 1%. We would be taking out additional borrowing of £120k-ish to get anywhere we would consider moving to and with the lack of properties available we are knocking it on the head.
The only thing the interest rate rises is doing is increasing mortgage and loan costs. It’s actually perpetuating the problem in my view.
I understand with a stronger pound the import costs might come down but inflation should be self limiting by definition.
I don’t understand it well but increasing mortgage and loan costs increases living and business costs that then have no choice but to increase goods costs or asking for pay rises. Seems a vicious circle.
Our mortgage is fixed until 2026 but I expect a 50% increase in my mortgage payments then. Best to start saving.
I understand with a stronger pound the import costs might come down but inflation should be self limiting by definition.
I don’t understand it well but increasing mortgage and loan costs increases living and business costs that then have no choice but to increase goods costs or asking for pay rises. Seems a vicious circle.
Our mortgage is fixed until 2026 but I expect a 50% increase in my mortgage payments then. Best to start saving.
blank said:
Anyone got any experience of "cancellation" fees with Accord?
i.e. if I signed up to a switch today but rates dropped in a couple of months (before the new deal had started) can you change without penalty?
Can't see anything in the documents.
Cancellation Policyi.e. if I signed up to a switch today but rates dropped in a couple of months (before the new deal had started) can you change without penalty?
Can't see anything in the documents.
Product switching – Once the product has been agreed for a product transfer, we won't allow clients to switch products between then and completion.
PT Cancellation – Once the product has been agreed, there is no way to retract that offer without incurring ERCs. These ERCs will be applied automatically at redemption.
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