Re-mortgage now or wait?

[Caddyshack]

Pixelpeep Electric said:

have our meeting with the broker booked for tomorrow..

£194k remaining
£375k valuation

currently with natwest on a 1.4% rate which ends in June.

Bit nervous about taking a 5 year deal at the moment, i think i'd rather pay a few points more and evaluate again after a 2 year deal?

What we all thinking?

2yr or a Tracker with no lock in would be for me as long as you can stomach an increase if you do go variable...the trackers are usefully below the 2 yr fixed so even with a 0.5% bank base hike the 2 yr fixed probably would still not be earning its keep.

[danpalmer1993]

Caddyshack said:

It is a good idea to think of it like keeping plates spinning - I, personally, would not go too overboard on mortgage overpayments that can be hard to get back if you need them - it is good to spin all the plates a bit with short term savings (deposit account with 3 months net income target), long term savings (stock market ISA perhaps) and mortgage overpayments then long term by trying to max the pension.

You have to plan to live too long, die to soon and become ill or disabled along the way (as our old Sales Director used to say at a big Financial Advisory firm)

I do very similar to this, however short term savings are 3 months of expenses rather than net income.

[Caddyshack]

danpalmer1993 said:

Caddyshack said:

It is a good idea to think of it like keeping plates spinning - I, personally, would not go too overboard on mortgage overpayments that can be hard to get back if you need them - it is good to spin all the plates a bit with short term savings (deposit account with 3 months net income target), long term savings (stock market ISA perhaps) and mortgage overpayments then long term by trying to max the pension.

You have to plan to live too long, die to soon and become ill or disabled along the way (as our old Sales Director used to say at a big Financial Advisory firm)

I do very similar to this, however short term savings are 3 months of expenses rather than net income.

Yes, I almost put that in brackets as it is probably more useful.

[Last Visit]

Caddyshack said:

Pixelpeep Electric said:

have our meeting with the broker booked for tomorrow..

£194k remaining
£375k valuation

currently with natwest on a 1.4% rate which ends in June.

Bit nervous about taking a 5 year deal at the moment, i think i'd rather pay a few points more and evaluate again after a 2 year deal?

What we all thinking?

2yr or a Tracker with no lock in would be for me as long as you can stomach an increase if you do go variable...the trackers are usefully below the 2 yr fixed so even with a 0.5% bank base hike the 2 yr fixed probably would still not be earning its keep.

I come off a 1.14% in June. Quite tempted by a 3yr fixed with HSBC at 4.09% (with fee), 3 yrs being in that sweeter spot for me in that its a better rate than some 2 yr deals but obviously not as long as a 5yr (better rate still) which is too long for me.

[Pixelpeep Electric]

Last Visit said:

Caddyshack said:

Pixelpeep Electric said:

have our meeting with the broker booked for tomorrow..

£194k remaining
£375k valuation

currently with natwest on a 1.4% rate which ends in June.

Bit nervous about taking a 5 year deal at the moment, i think i'd rather pay a few points more and evaluate again after a 2 year deal?

What we all thinking?

2yr or a Tracker with no lock in would be for me as long as you can stomach an increase if you do go variable...the trackers are usefully below the 2 yr fixed so even with a 0.5% bank base hike the 2 yr fixed probably would still not be earning its keep.

I come off a 1.14% in June. Quite tempted by a 3yr fixed with HSBC at 4.09% (with fee), 3 yrs being in that sweeter spot for me in that its a better rate than some 2 yr deals but obviously not as long as a 5yr (better rate still) which is too long for me.

other half just text me funnily enough mentioning she'd seen some good 3yr deals - think that might be the way forward... i'll report back on monday and let you all know what we managed to secure.

[anonymous-user]

Pixelpeep Electric said:

Bit nervous about taking a 5 year deal at the moment, i think i'd rather pay a few points more and evaluate again after a 2 year deal?

What we all thinking?

I had to make the same decision back in June last year on two properties at the same time. I ended up going for a five year fixed on our home at 2.97% and a 2 year fixed on my BTL at 2.84%

Both properties were around 1.6% on the previous mortgages. My reasoning at the time was I wanted a bit of stability and certainty on our home (this is the bigger mortgage) and was prepared to take a bit of a risk on the BTL as I am going to pay of 10% each year.

Still unsure if I made the right choice, but I was kind of hedging my bets. Obviously I will be kicking myself if rates go back to 0.25% or if rates are still high in 2 years when the 2 year fix comes to an end.

I feel I am actually going to lose this either way.

[Jakey123]

wormus said:

Of course you’re right, but makes me wonder what happened to the standard 2.5x salary, 5% deposit, 25 year mortgage people used to have. Different times.

The house market got artifically inflated via schemes and incentives, and is now a mega bubble.

You are stuck in the past with that 2.5x salary idea.
Certainly around the SE, youd be lucky to get a garage for 2.5x avg salary let alone a house/flat.

[Last Visit]

Pixelpeep Electric said:

Last Visit said:

Caddyshack said:

Pixelpeep Electric said:

have our meeting with the broker booked for tomorrow..

£194k remaining
£375k valuation

currently with natwest on a 1.4% rate which ends in June.

Bit nervous about taking a 5 year deal at the moment, i think i'd rather pay a few points more and evaluate again after a 2 year deal?

What we all thinking?

2yr or a Tracker with no lock in would be for me as long as you can stomach an increase if you do go variable...the trackers are usefully below the 2 yr fixed so even with a 0.5% bank base hike the 2 yr fixed probably would still not be earning its keep.

I come off a 1.14% in June. Quite tempted by a 3yr fixed with HSBC at 4.09% (with fee), 3 yrs being in that sweeter spot for me in that its a better rate than some 2 yr deals but obviously not as long as a 5yr (better rate still) which is too long for me.

other half just text me funnily enough mentioning she'd seen some good 3yr deals - think that might be the way forward... i'll report back on monday and let you all know what we managed to secure.

Selected a 4.19% 3yrs fixed with no fee today. Its the 3rd time I've changed in the past month and a half and will do so again if I can find better before June.

[anonymous-user]

Jakey123 said:

wormus said:

Of course you’re right, but makes me wonder what happened to the standard 2.5x salary, 5% deposit, 25 year mortgage people used to have. Different times.

The house market got artifically inflated via schemes and incentives, and is now a mega bubble.

You are stuck in the past with that 2.5x salary idea.
Certainly around the SE, youd be lucky to get a garage for 2.5x avg salary let alone a house/flat.

Stuck in the past? Maths hasn’t changed. If you cannot afford it at 5% interest rates, you never could afford it.

[Turtle Shed]

We're about to take out our first mortgage in 17 years...

I'm 59 now, see now need to stop doing work I enjoy so probably a ten year term with a five year fix. Should be able to get around the 4% mark, which makes for easily affordable payments. In five years inflation and over paying will probably mean the effective cost is half of what it will be when I take it out.

If interest rates drop, and I think they will, I'll be overpaying, but happy to accept that as the price for peace of mind.

[m3jappa]

wormus said:

Jakey123 said:

wormus said:

Of course you’re right, but makes me wonder what happened to the standard 2.5x salary, 5% deposit, 25 year mortgage people used to have. Different times.

The house market got artifically inflated via schemes and incentives, and is now a mega bubble.

You are stuck in the past with that 2.5x salary idea.
Certainly around the SE, youd be lucky to get a garage for 2.5x avg salary let alone a house/flat.

Stuck in the past? Maths hasn’t changed. If you cannot afford it at 5% interest rates, you never could afford it.

Maths hasn't changed but now a single person can not consider borrowing 2.5 times their income to buy anything, maybe just maybe up north but in the south, round here certainly not.

Now its 2 people on a very good salary in order to buy something very average and at 5x multiple of joint income (if your a ftb)

[OutInTheShed]

m3jappa said:

Maths hasn't changed but now a single person can not consider borrowing 2.5 times their income to buy anything, maybe just maybe up north but in the south, round here certainly not.

Now its 2 people on a very good salary in order to buy something very average and at 5x multiple of joint income (if your a ftb)

Plenty of people buy with 2.5x mortgages.
Some people have very good salaries to multiply by 2.5
Some people inherit chunky deposits.

[DonkeyApple]

m3jappa said:

Maths hasn't changed but now a single person can not consider borrowing 2.5 times their income to buy anything, maybe just maybe up north but in the south, round here certainly not.

Now its 2 people on a very good salary in order to buy something very average and at 5x multiple of joint income (if your a ftb)

Large chunks of the Essex population have completely lost themselves up their own arses over the last 20 years though. Pretty much every town is riddled with perfumed ponces thinking they're special because they saw someone who was on TV once and that means they now have to live in a manshun.

It's not alone obviously, half the country have evolved into little princesses with little princess lifestyle demands.

In reality, property has remained affordable to those who aren't ill and still think straight, hence why the market still exists and people are still buying and selling.

The dynamics have changed. With women now allowed to work as well as vote the prices of property has increased to reflect the much higher number of dual income households and other factors have obviously been at play but there remain sub £200k properties for sale across Essex but they just aren't any good for playing princesses in as they won't even have a separate gift wrapping room or railings outside to paint gold tops on.

[havoc]

OutInTheShed said:

m3jappa said:

Maths hasn't changed but now a single person can not consider borrowing 2.5 times their income to buy anything, maybe just maybe up north but in the south, round here certainly not.

Now its 2 people on a very good salary in order to buy something very average and at 5x multiple of joint income (if your a ftb)

Plenty of people buy with 2.5x mortgages.
Some people have very good salaries to multiply by 2.5
Some people inherit chunky deposits.

Very very few who aren't well into their current mortgage and have therefore built up a ton of capital...which is not the situation jappa is referring to.

If you take the AVERAGE house price of £280k, and you generously allow a 15% deposit (£42k), you're left with ~£240k mortgage, so your 2.5x salary multiple would require someone on close to £100k per annum. That's top-5% of the population territory, and they wouldn't be buying an 'average house'.

Alternatively, you're fortunate to inherit a chunky deposit. But let's say you're on average salary (£38k), then your 2.5x mortgage would be <£100k, so you'd need to inherit close to £200k AND be happy putting it all in a house. I only know of a handful of people who've inherited that level of money, and they've all been >>40 years old at the time. But then maybe I don't hang around with enough powerful-director types...


In short, Jappa is right. For the vast majority of the UK, if you're not already on the housing 'ladder' :spit: then you're facing some really unpalatable choices.

Edited by havoc on Saturday 25th February 15:37

[havoc]

Caddyshack said:

Pixelpeep Electric said:

have our meeting with the broker booked for tomorrow..

£194k remaining
£375k valuation

currently with natwest on a 1.4% rate which ends in June.

Bit nervous about taking a 5 year deal at the moment, i think i'd rather pay a few points more and evaluate again after a 2 year deal?

What we all thinking?

2yr or a Tracker with no lock in would be for me as long as you can stomach an increase if you do go variable...the trackers are usefully below the 2 yr fixed so even with a 0.5% bank base hike the 2 yr fixed probably would still not be earning its keep.

I'm torn. Current provider are offering a sub-4% 5-year fix with a sub-£500 fee which appeals.

...but it's a 5-year fix as you say, and a shorter-term deal or a longer-term tracker would be where I'd want to go based on forecasts of BoE base rates...except in both cases I'll end up paying even more in the short-term...


Edit: Just used the 6-mth SONIA long-term forecast as a guide to BoE base-rate trend (discounting back by the current disconnect between SONIA and base-rate), and between the Barclays 5-year tracker and a typical 4% fix there's ~£2,500 or so of additional cost in the tracker. So a good fix might be the right route...

Edited by havoc on Saturday 25th February 16:39

[RoadToad84]

havoc said:

I'm torn. Current provider are offering a sub-4% 5-year fix with a sub-£500 fee which appeals.

...but it's a 5-year fix as you say, and a shorter-term deal or a longer-term tracker would be where I'd want to go based on forecasts of BoE base rates...except in both cases I'll end up paying even more in the short-term...

I took a 10 year fix at 3.7% in October 22 through Coventry. I wasn't keen on committing for that long, but it was a fee-free arrangement and there were no early settlement fees. So if and when rates drop, I can swap with no penalty beyond a £160 exit fee.

[Sarnie]

Platform (Co-Op Bank) released some cheap rates last week and withdrew them all on Thursday without notice.

There have been murmurs of lenders upping rates imminently.

There has been a lot of talk on HSBC's rates on this thread so thought I'd let everyone know what HSBC have just sent round, confirming rates are going up on Wednesday.

So, for anyone who has been watching rates come down over recent weeks and have been holding fire before committing, now might be the time as other lenders tend to follow HSBC's lead....

"We’re changing our mortgage products

With effect from Wednesday 1st March, we’ll be making the following changes to our residential and Buy to Let (BTL) mortgage product ranges:

Summary of changes

Our Residential Standard Variable Rate (SVR) is changing from 6.79% to 6.99% and our BTL SVR is changing from 6.35% to 6.85%. Any customers who are currently on our Residential or BTL SVR will be notified of changes to their payments in writing.
We will also be making the following changes to the rest of our residential mortgage product ranges:

Existing residential customer switching / borrowing more
• 2 Year Fixed Fee Saver at 60%, 70%, 75% and 85% LTV increased
• 3, 5 & 10 Year Fixed Fee Saver at 60%, 70% and 75% LTV increased
• 3 & 10 Year Fixed Standard at 60%, 70% and 75% LTV increased
• 5 Year Fixed Standard at 60%, 70%, 75%, 80% and 85% LTV increased
• 5 Year Fixed Premier Exclusive at 60%, 70%, 75%, 80% and 85% LTV increased

Residential first time buyer / home mover
• 2 & 5 Year Fixed Fee Saver at 90% LTV increased
• 2 Year Fixed Standard at 80% and 85% LTV Increased
• 5 Year Fixed Standard at 80%, 85% and 90% LTV increased
• 5 Year Fixed Premier Exclusive at 80%, 85% and 90% LTV increased

Residential remortgage
• 2 Year Fixed Fee Saver at 60%, 70% and 75% LTV increased
• 2 Year Fixed Standard at 60%, 70% and 75% LTV increased
• 5 Year Fixed Fee Saver at 70%, 75%, 80% and 85% LTV increased
• 5 Year Fixed Standard at 60%, 70%, 75%, 80% and 85% LTV increased
• 5 Year Fixed Premier Exclusive at 60%, 70%, 75%, 80% and 85% LTV increased
• 10 Year Fixed Fee Saver at 60%, 70%, 75% and 80% LTV increased
• 10 Year Fixed Standard at 70% and 75% LTV increased

International residential
• 2 Year Fixed Standard at 60%, 70% and 75% LTV increased
• 10 Year Fixed Fee Saver at 60, 70% and 75% LTV increased
• 10 Year Fixed Standard at 70% and 75% LTV increased
There are no changes to any of our other interest rates or fixed rate end dates.
Further information

• To secure existing product codes, please submit applications in full by midnight, Tuesday 28th February.
• All evidential and supporting documentation must be provided within 30 calendar days of submission.
• The product finder tool and sourcing systems will be updated for Wednesday 1st March.

HSBC UK

For Intermediary use only.

Please do not reply to this email. This mailbox is not monitored and you will not receive a response.

[RenesisEvo]

Sarnie said:

There have been murmurs of lenders upping rates imminently.

Thanks for sharing! What's behind the increase, predicted base rate movement or something else?

I wish I could take action at this point but I'm locked in with an ERC that kills most deals but probably prevented any knee-jerk reaction to the madness last year. I've still some time left before my current fix ends (near Christmas) so from the summer onwards I'll be taking a much closer look at where things might be headed. I'm hoping there's another nadir between now and the end of the year but who knows.

[Pixelpeep Electric]

Caddyshack said:

Pixelpeep Electric said:

have our meeting with the broker booked for tomorrow..

£194k remaining
£375k valuation

currently with natwest on a 1.4% rate which ends in June.

Bit nervous about taking a 5 year deal at the moment, i think i'd rather pay a few points more and evaluate again after a 2 year deal?

What we all thinking?

2yr or a Tracker with no lock in would be for me as long as you can stomach an increase if you do go variable...the trackers are usefully below the 2 yr fixed so even with a 0.5% bank base hike the 2 yr fixed probably would still not be earning its keep.

Bit of a curve ball from our visit on saturday.

3 year fixed with HSBC at 4.11% £999 fees - but we've consolidated another credit account by borrowing a bit extra so it's removed a separate £200 a month payment so we are only paying £120 a month more than we were when we come out the other side.

If the rate goes down before the change over in June we can switch to the lower rate, but as it stands, the worst it's gonna be for us is 4.11%

[Sarnie]

RenesisEvo said:

Thanks for sharing! What's behind the increase, predicted base rate movement or something else?

I wish I could take action at this point but I'm locked in with an ERC that kills most deals but probably prevented any knee-jerk reaction to the madness last year. I've still some time left before my current fix ends (near Christmas) so from the summer onwards I'll be taking a much closer look at where things might be headed. I'm hoping there's another nadir between now and the end of the year but who knows.

There are lots of forces at play that dictate mortgage pay rates. Of course the base rate is a variable but not the only one, it's been discussed on this thread a lot.

Sometimes it can simply be that a lender has received too many applications so up the rates to reduce the number of application they receive.........but that then has a knock on effect as other lenders follow suit.