Re-mortgage now or wait?
Discussion
Chainedtomato said:
We aren’t paying it. 1.99% ends in March 24. ERC is about 3,500 ish give or take.
Madness atm
Yup, same here. Fixed @ 2.19%, ends Dec 2023, ERC is around £2800. Switching now to a 5yr fix would be @ 5.39%, cost me the £2800, plus our repayments would jump by another £300, I'd rather just wait it out and see where we are back end of next year. Offering nearly 5.5% when baserate is 2.25% seems madness to me, I'm not biting.Madness atm
StressedEric said:
Awful, I have no words, I hope you survive mate.
Thanks. This month, i've already started tossing the extra into savings to 'live' like its Feb and get used to it.Small saving grace though - although i've reserved a rate to switch for next Feb, Nationwide have assured me that if in the very unlikely event that their rates did drop a bit, then i could refuse and reswitch to the lower rate before Feb 1st.
So in theory, 5.14% is the worst it will be for me.
okgo said:
That is a big gap, what is more typical between base rate and best deals?
Historically banks offer products 0.5 - 2% over the base rate. Since 08 it’s been about 1% over the base rate. I see a lot of the ‘experts’ have changed their minds are predicting the base rate will top out around 5 - 5.5% by end of 23. If that’s the case then banks offering 7.5% on a mortgage product isn’t out of the question although it’ll more likely be 6.5% ish if you meet all the criteria for their best products Edited by Chainedtomato on Monday 3rd October 11:08
skinnyman said:
Yup, same here. Fixed @ 2.19%, ends Dec 2023, ERC is around £2800. Switching now to a 5yr fix would be @ 5.39%, cost me the £2800, plus our repayments would jump by another £300, I'd rather just wait it out and see where we are back end of next year. Offering nearly 5.5% when baserate is 2.25% seems madness to me, I'm not biting.
My ‘this is stupid and panic setting in’ radar has gone off. Waiting it out. Overpaying until easy access savings accounts rates jump a bit more, then save into that and pay off a lump sum come renewal time After taking another look at my mortgage agreement it turns out that my 1.84% fix actually ends in Oct 23 and not Jan 24 as I thought. While it's only a few months difference it feels greater as it's a different year. However, it does mean that the ERC decreases to 1% for the final year so moving early is about £4k cheaper come the end of this month. The best rate available from my current provider is 4.45% which would make the mortgage around £200 more pm... so not as bad as I thought.
One thing with my situation is that the lender does currently have our house valued around 40% less than what comparable house around here now sell for. This would push the current 70%LTV down quite a bit and possibly give a better deal. Does anyone have experience of how this is normally reevaluated?
One thing with my situation is that the lender does currently have our house valued around 40% less than what comparable house around here now sell for. This would push the current 70%LTV down quite a bit and possibly give a better deal. Does anyone have experience of how this is normally reevaluated?
devnull said:
I had to reserve 5.14% with nationwide on Saturday. Earliest I could do it. My heart sank as I saw it go up and up this week. £550 a month increase from Feb just like that.
Ouch!!!! Feeling pain there. You must have similar figures to us. If we were locking in now we would be looking at £600 a month increase. Feeling very lucky right now. 
crxdave said:
Is there any scenario where waiting out until next year would pay off? Current 2yr fix ends June 2023, looking at a £4k ERC and a £600pm increase if we remortgage now 
I don't think anybody can give you that answer, they have done a u-turn on it but the damage has already been done for rates. I think they were going to go up slowly anyway but perhaps not as sharply as initially thought. Ultimately you are betting against what a new fixed rate now vs in your new deal. If it ends Jun 2023 then you can lock in 3-6months before hand, will rates increase that much in 3 months till the end of the year?
and if you did lock in now can you afford the ERC and the increase?
crxdave said:
Is there any scenario where waiting out until next year would pay off? Current 2yr fix ends June 2023, looking at a £4k ERC and a £600pm increase if we remortgage now
Any scenario ? Well if inflation suddenly dropped to around 2% there'd be no justification to increase rates. Even if it made significant moves in that direction then rate rises would likely be put on-hold to avoid overshooting the target.crxdave said:
Is there any scenario where waiting out until next year would pay off? Current 2yr fix ends June 2023, looking at a £4k ERC and a £600pm increase if we remortgage now
In a similar scenario but around 4 months further behind. I'm going to sit and wait, because the picture will likely be quite different come summer next year. Especially if we get through (or not!) the winter in energy terms. If nothing else there are more announcements to follow from the government over the next month or so, which will change the trajectory - and may give more long term confidence / stability that is clearly lacking in the markets right now. That uncertainty is priced into the higher rates. Hopefully the gov't will be wary of the impact they are making so will avoid spiking rates further - but that assumes some level of intelligence at the top (you may form your own opinion there). With a big ERC, knowing that the rate will step up in almost any scenario, it would take a big gap in rates to make up for the large sum - that ship has already sailed sadly (fixing 2-3 months ago). You and I are into damage limitation - minimising the losses, at which point paying an ERC seems fruitless.
Just my two cents - I am no expert, just how I see it. I am able to budget/stomach a higher mortgate rate (to a point!), not everyone can sadly.
this thread got me antsy enough to go and check the length of my current fixed rate mortgage deal. I knew I'd fixed it back during the lock down days but couldn't remember how long for ( I thought it was 2 years)
anyway with Santander and
1.59% fixed until August..... 2026.
for once I did something right financially in my life. I am going to give my old self a hearty handshake...
anyway with Santander and
1.59% fixed until August..... 2026.
for once I did something right financially in my life. I am going to give my old self a hearty handshake...
I'm not smart enough to understand how all the interconnecting things that control the economy influence the interest rate but all I know is that the ACTUAL BOE base rate hasn't changed and the rates now being offered by mortgage providers are quite a % over base rate than what they normally would be. With the mini budget being back pedalled, the new cabinet hopefully learning it's lesson and the pound now back to where it was before all this madness, could we be in a situation where folk have possibly jumped the gun or is it the energy crisis all over again?
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