Discussion
yes, the perennial question however the PH collective generally know what the craic is with regards these things..
Im currently going through a remortagage application at the minute. We are (due to having a 10pc deposit 1 year ago), paying 6pc on our mortgage which isnt good.
however we are now at a 20pc deposit stage (in terms of cash) so I've applied for a 25% ltv at 3.04pc LTV fixed for 3 years. If the valutaion comes good, then happy days, it chips bearly 500 quid a month off the repayments. we can afford the early repayment charge to get out of the current mortgage.
If that valuation doesnt come good, then the next best deal out there is a 2 year 2.99pc tracker. the fees looks ok, as do the repayments at 2.99pc.
however, would I be ill advised to go for a 2 year tracker at the mo? A bit of research point that the markets dont think rates are going anywhere for a couple of years, so even if I do take the tracker, if I get burnt, it would only be for a couple of mortgage payments or so max. Its clear they arent going anywhere for the immediate time being.
If others are to be believed, then rates might not go up for 3 years.
If it makes any difference we net just shy of 5k between us and the tracker mortgage payment would be about 970k on an outstanding balance of 200k against the 1454 we are currently paying.
we could obviously afford the mortgage if rates rise, even considerably, but the decision is whether to pay a little bit more for insurance (i.e 3.7-4pc) and fix, oe just go for the 2 year tracker at the discount rate and cross our fingers.
this might be academic if the valuation done the other day comes good (50:50 I reckon) but that was a bit of a punt at a figure slightly in excess of what we paid for our (london) flat a year ago. might pull it off might not (I did have comps to prove the valuation but its still a bit of a punt)
I'm not bothered by the short term per se because we will have another 20 pc in cash in 2 years time (we make reasonable overpayments each month) so dont need the security of a longer term fix.
thoughts appreciated...
eta: I have spoken to a couple of good mates who work in finance with something to do with trading money in relation to interest rates and they agree the boebr aint going anywhere for at least 2 years and if it does go up it will be in small stages are they right though!
Im currently going through a remortagage application at the minute. We are (due to having a 10pc deposit 1 year ago), paying 6pc on our mortgage which isnt good.
however we are now at a 20pc deposit stage (in terms of cash) so I've applied for a 25% ltv at 3.04pc LTV fixed for 3 years. If the valutaion comes good, then happy days, it chips bearly 500 quid a month off the repayments. we can afford the early repayment charge to get out of the current mortgage.
If that valuation doesnt come good, then the next best deal out there is a 2 year 2.99pc tracker. the fees looks ok, as do the repayments at 2.99pc.
however, would I be ill advised to go for a 2 year tracker at the mo? A bit of research point that the markets dont think rates are going anywhere for a couple of years, so even if I do take the tracker, if I get burnt, it would only be for a couple of mortgage payments or so max. Its clear they arent going anywhere for the immediate time being.
If others are to be believed, then rates might not go up for 3 years.
If it makes any difference we net just shy of 5k between us and the tracker mortgage payment would be about 970k on an outstanding balance of 200k against the 1454 we are currently paying.
we could obviously afford the mortgage if rates rise, even considerably, but the decision is whether to pay a little bit more for insurance (i.e 3.7-4pc) and fix, oe just go for the 2 year tracker at the discount rate and cross our fingers.
this might be academic if the valuation done the other day comes good (50:50 I reckon) but that was a bit of a punt at a figure slightly in excess of what we paid for our (london) flat a year ago. might pull it off might not (I did have comps to prove the valuation but its still a bit of a punt)
I'm not bothered by the short term per se because we will have another 20 pc in cash in 2 years time (we make reasonable overpayments each month) so dont need the security of a longer term fix.
thoughts appreciated...
eta: I have spoken to a couple of good mates who work in finance with something to do with trading money in relation to interest rates and they agree the boebr aint going anywhere for at least 2 years and if it does go up it will be in small stages are they right though!
Edited by princeperch on Sunday 15th April 21:04
NIIKME said:
Is there a way to analyse if lifetime trackers have outperformed fixed rates over a long term period, say the last 20 years, and if so at what rate you would need to be negotiating one above the BoE BR ?
No. There would be far too many variables to consider.I'd be suprised if many people on lifetime trackers actually stayed on them for the lifetime of the mortgage. At some point in a mortgage term the BoEBR is going to rise, at which point most would jump ship. I'd be suprised if anyone who takes one out now was still on it in say 5/6 years as in that time the base rate will have risen above the 0.5% it currently is.
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