Re-mortgage now or wait?
Discussion
Crumpet said:
Personally I’m not too fussed over having a large, secured debt over my head.
For me I’ve always tried to see the worst case, so that if I had to sell my house I’ve made sure I’d have enough equity to buy somewhere that I’d actually want to live and be mortgage free. I don’t think I’d be doing it if the equity in the house wasn’t enough to buy something decent if I had to sell up.
I have quoted these comments because this is how i feel about a mortgage. For me I’ve always tried to see the worst case, so that if I had to sell my house I’ve made sure I’d have enough equity to buy somewhere that I’d actually want to live and be mortgage free. I don’t think I’d be doing it if the equity in the house wasn’t enough to buy something decent if I had to sell up.
So many people seem to live in total fear about paying it off and not wanting one, but imo they lose out.
Don't get me wrong i would love to be mortgage free. But mortgage free on what exactly? a 200k house a 500k house? million pound house?
I have played the mortgage game and have gone from being a ftb 14 years ago to now having around 60% equity in something worth a fairly substantial sum. so worst case i could sell up and buy something pretty decent outright straight away.
I get that for a lot of people the stress of that debt is scary. But then imagine how the poor sods who rent feel. Paying the same as my mortgage payment for half the house they will never own. Now that would stress me out.
m3jappa said:
I have quoted these comments because this is how i feel about a mortgage.
So many people seem to live in total fear about paying it off and not wanting one, but imo they lose out.
Don't get me wrong i would love to be mortgage free. But mortgage free on what exactly? a 200k house a 500k house? million pound house?
I have played the mortgage game and have gone from being a ftb 14 years ago to now having around 60% equity in something worth a fairly substantial sum. so worst case i could sell up and buy something pretty decent outright straight away.
I get that for a lot of people the stress of that debt is scary. But then imagine how the poor sods who rent feel. Paying the same as my mortgage payment for half the house they will never own. Now that would stress me out.
That's quite an interesting perspective. I'm probably one of those people you referred to. Bought my first house at 33, and am looking to clear the mortgage ASAP purely to get rid of the debt. I'm happy with this house, it's tiny but I've no plans to move. Bought it at £102,000, it's probably worth £120,000 now, when the mortgage interest is applied, I'll have most likely broken even. I think I'm ok with that, as I aim to be mortgage free within 10 years, then start loading up my pension contributions. So many people seem to live in total fear about paying it off and not wanting one, but imo they lose out.
Don't get me wrong i would love to be mortgage free. But mortgage free on what exactly? a 200k house a 500k house? million pound house?
I have played the mortgage game and have gone from being a ftb 14 years ago to now having around 60% equity in something worth a fairly substantial sum. so worst case i could sell up and buy something pretty decent outright straight away.
I get that for a lot of people the stress of that debt is scary. But then imagine how the poor sods who rent feel. Paying the same as my mortgage payment for half the house they will never own. Now that would stress me out.
It's probably not the most sensible course of action, but it suits my appetite for risk and debt. The only downside is I won't have the option to downsize on future so I'll need to be disciplined with savings/pension
My fixed rate deal with Barclays is coming to an end soon so I've been having a look at my options for remortgaging (first time I've had to do this)
Looking at a 30 year term with <60% LTV. I'm thinking of fixing for another 5 years. From what I can tell I think it'll work out better to take one with a product fee and add that to the balance of the mortgage - typical fees are ~£1000 and over the 5 years the increase in monthly payments totals significantly less than that. I'm also ignoring the rate after the fixed period ends - I am expecting (hoping!) interest rates have dropped again by then and I'll be able to get a better deal when I need to remortgage again. If interest rates have increased in 5 years time then having a mortgage with a lower rate after the fixed period would be great, but I think it's unlikely and I'm not sure the higher monthly payments make it worth it. The follow on rates are typically 6.99% to 8.74%.
Options I'm considering:
1. Natwest - 4.20% (online only, overpay up to 20%)
2. HSBC - 4.33% (overpay up to 10%)
3. Santander - 4.45% (overpay up to 10%)
4. Barclays - 4.46% (current lender)
I'm not sure I would gain any convenience by staying with Barclays and the .45% interest different to Natwest will be quite a few hundred ££ difference in monthly payments over the next 5 years.
I don't think I need to speak to a broker but it would be great if someone who has been through similar recently, or is in the industry could check my logic here.
The options above are what I've taken from the MSE website this evening. I also had a look yesterday evening and I'm sure that Santander had a lower rate on offer which seems to have gone today, but the Natwest one has sprung up. Is it really changing that quickly?!
Looking at a 30 year term with <60% LTV. I'm thinking of fixing for another 5 years. From what I can tell I think it'll work out better to take one with a product fee and add that to the balance of the mortgage - typical fees are ~£1000 and over the 5 years the increase in monthly payments totals significantly less than that. I'm also ignoring the rate after the fixed period ends - I am expecting (hoping!) interest rates have dropped again by then and I'll be able to get a better deal when I need to remortgage again. If interest rates have increased in 5 years time then having a mortgage with a lower rate after the fixed period would be great, but I think it's unlikely and I'm not sure the higher monthly payments make it worth it. The follow on rates are typically 6.99% to 8.74%.
Options I'm considering:
1. Natwest - 4.20% (online only, overpay up to 20%)
2. HSBC - 4.33% (overpay up to 10%)
3. Santander - 4.45% (overpay up to 10%)
4. Barclays - 4.46% (current lender)
I'm not sure I would gain any convenience by staying with Barclays and the .45% interest different to Natwest will be quite a few hundred ££ difference in monthly payments over the next 5 years.
I don't think I need to speak to a broker but it would be great if someone who has been through similar recently, or is in the industry could check my logic here.
The options above are what I've taken from the MSE website this evening. I also had a look yesterday evening and I'm sure that Santander had a lower rate on offer which seems to have gone today, but the Natwest one has sprung up. Is it really changing that quickly?!
s p a c e m a n said:
I'm just back in here to add my name to the list of people singing sarnies praises. Getting us to fill in forms and reply to emails must be driving him crazy but he has been an absolute pleasure to work with, I'm certain that most brokers would have stuck us at the bottom of their to do list by now. 5 star Google review, would recommend.
Same for me as well - no end of back and forth with the lender, but Sarnie has been really helpful and patient throughout the process. petrolbloke said:
My fixed rate deal with Barclays is coming to an end soon so I've been having a look at my options for remortgaging (first time I've had to do this)
Looking at a 30 year term with <60% LTV. I'm thinking of fixing for another 5 years. From what I can tell I think it'll work out better to take one with a product fee and add that to the balance of the mortgage - typical fees are ~£1000 and over the 5 years the increase in monthly payments totals significantly less than that.
Just quoting this bit: sure, the total extra paid over 5 years will be <£1000, but the difference in the balance at the end, plus the extra payments will be >£1000. I think you are assuming that at the end of 5 years you will be in the same position either way.Looking at a 30 year term with <60% LTV. I'm thinking of fixing for another 5 years. From what I can tell I think it'll work out better to take one with a product fee and add that to the balance of the mortgage - typical fees are ~£1000 and over the 5 years the increase in monthly payments totals significantly less than that.
As with all other comparisons, how to pay the £1000 depends on whether you could do better elsewhere: if you've access to a savings account that you can be certain will pay (net of tax) more than your mortgage rate, stick the £1000 in there, add the £1000 fee to your mortgage, and in the long term you win. If (more likely) you don't, pay the fee up front.
DonkeyApple said:
No real point to paying interest for 25 years on some fees. But easy enough to pay off via monthly over payments and then forget to cancel the extra £100/month being paid and get a pleasant surprise in ten years. 
This is true, I do tend to find that people may focus on the £1000 fee attracting interest when I am more concerned about the £300,000 attracting interest at the very same rate.m3jappa said:
Crumpet said:
Personally I’m not too fussed over having a large, secured debt over my head.
For me I’ve always tried to see the worst case, so that if I had to sell my house I’ve made sure I’d have enough equity to buy somewhere that I’d actually want to live and be mortgage free. I don’t think I’d be doing it if the equity in the house wasn’t enough to buy something decent if I had to sell up.
I have quoted these comments because this is how i feel about a mortgage. For me I’ve always tried to see the worst case, so that if I had to sell my house I’ve made sure I’d have enough equity to buy somewhere that I’d actually want to live and be mortgage free. I don’t think I’d be doing it if the equity in the house wasn’t enough to buy something decent if I had to sell up.
So many people seem to live in total fear about paying it off and not wanting one, but imo they lose out.
Don't get me wrong i would love to be mortgage free. But mortgage free on what exactly? a 200k house a 500k house? million pound house?
I have played the mortgage game and have gone from being a ftb 14 years ago to now having around 60% equity in something worth a fairly substantial sum. so worst case i could sell up and buy something pretty decent outright straight away.
I get that for a lot of people the stress of that debt is scary. But then imagine how the poor sods who rent feel. Paying the same as my mortgage payment for half the house they will never own. Now that would stress me out.
I guess the argument is, if the financial system does collapse and we have a reset, like some are predicting, the banks are set up for bail ins and just like in 1930, any asset with any debt attached to it was called was lost.
Even the super rich lost everything, in fact in many ways they got hit hardest, because the banks kept all their money and all their leveraging was sold on at the new rates that no one could afford.
Well if there is a collapse, a reset, only those who owe nothing at all will be safe.
Will it happen? Who knows anymore? I would have laughed that thought off a couple of years ago, but I think anything is possible now.
Some of the big money guys have been discussing this a lot recently.
It is amazing to see so many who mocked the idea of this happening pre Covid are now shouting very loudly to get all debts paid off, pull in all savings, investments and make sure you have no debt before even thinking about anything else financially.
Daniela Cambone always has some good guests who will argue both sides.
I have no idea who is right, but interesting stuff.
Daniela Cambone ITM trading
Even the super rich lost everything, in fact in many ways they got hit hardest, because the banks kept all their money and all their leveraging was sold on at the new rates that no one could afford.
Well if there is a collapse, a reset, only those who owe nothing at all will be safe.
Will it happen? Who knows anymore? I would have laughed that thought off a couple of years ago, but I think anything is possible now.
Some of the big money guys have been discussing this a lot recently.
It is amazing to see so many who mocked the idea of this happening pre Covid are now shouting very loudly to get all debts paid off, pull in all savings, investments and make sure you have no debt before even thinking about anything else financially.
Daniela Cambone always has some good guests who will argue both sides.
I have no idea who is right, but interesting stuff.
Daniela Cambone ITM trading
The key to being modern super wealthy is that you owe the banks more than you have sitting within their immediate grasp. And what could be technically bailed in is a fraction of what is owned.
Most of the apocalypse social media content is just disenfranchised re workings of Ian Bone's manifesto and pandering to a chosen audience to milk them like cows.
Most of the apocalypse social media content is just disenfranchised re workings of Ian Bone's manifesto and pandering to a chosen audience to milk them like cows.
Edited by DonkeyApple on Thursday 14th March 18:20
Ed.Neumann said:
I guess the argument is, if the financial system does collapse and we have a reset, like some are predicting, the banks are set up for bail ins and just like in 1930, any asset with any debt attached to it was called was lost.
Even the super rich lost everything, in fact in many ways they got hit hardest, because the banks kept all their money and all their leveraging was sold on at the new rates that no one could afford.
Well if there is a collapse, a reset, only those who owe nothing at all will be safe.
Will it happen? Who knows anymore? I would have laughed that thought off a couple of years ago, but I think anything is possible now.
Some of the big money guys have been discussing this a lot recently.
It is amazing to see so many who mocked the idea of this happening pre Covid are now shouting very loudly to get all debts paid off, pull in all savings, investments and make sure you have no debt before even thinking about anything else financially.
Daniela Cambone always has some good guests who will argue both sides.
I have no idea who is right, but interesting stuff.
Daniela Cambone ITM trading
There are conspiracy theory threads in other places on PH.Even the super rich lost everything, in fact in many ways they got hit hardest, because the banks kept all their money and all their leveraging was sold on at the new rates that no one could afford.
Well if there is a collapse, a reset, only those who owe nothing at all will be safe.
Will it happen? Who knows anymore? I would have laughed that thought off a couple of years ago, but I think anything is possible now.
Some of the big money guys have been discussing this a lot recently.
It is amazing to see so many who mocked the idea of this happening pre Covid are now shouting very loudly to get all debts paid off, pull in all savings, investments and make sure you have no debt before even thinking about anything else financially.
Daniela Cambone always has some good guests who will argue both sides.
I have no idea who is right, but interesting stuff.
Daniela Cambone ITM trading
Even if there was a collapse, the wealthy would get the money back and the poor would be poor again, humans are creatures of habit.
VeeReihenmotor6 said:
m3jappa said:
Crumpet said:
Personally I’m not too fussed over having a large, secured debt over my head.
For me I’ve always tried to see the worst case, so that if I had to sell my house I’ve made sure I’d have enough equity to buy somewhere that I’d actually want to live and be mortgage free. I don’t think I’d be doing it if the equity in the house wasn’t enough to buy something decent if I had to sell up.
I have quoted these comments because this is how i feel about a mortgage. For me I’ve always tried to see the worst case, so that if I had to sell my house I’ve made sure I’d have enough equity to buy somewhere that I’d actually want to live and be mortgage free. I don’t think I’d be doing it if the equity in the house wasn’t enough to buy something decent if I had to sell up.
So many people seem to live in total fear about paying it off and not wanting one, but imo they lose out.
Don't get me wrong i would love to be mortgage free. But mortgage free on what exactly? a 200k house a 500k house? million pound house?
I have played the mortgage game and have gone from being a ftb 14 years ago to now having around 60% equity in something worth a fairly substantial sum. so worst case i could sell up and buy something pretty decent outright straight away.
I get that for a lot of people the stress of that debt is scary. But then imagine how the poor sods who rent feel. Paying the same as my mortgage payment for half the house they will never own. Now that would stress me out.
It’s pretty much there now and I’m happy for it to tick along until the end of the term now.
Caddyshack said:
There are conspiracy theory threads in other places on PH.
Even if there was a collapse, the wealthy would get the money back and the poor would be poor again, humans are creatures of habit.
People also need to stop and question how they fell down a rabbit hole that lead to being served spanker content by the likes of entities that sell trading metal to preppers and other assorted deranged loons and political extremists. Even if there was a collapse, the wealthy would get the money back and the poor would be poor again, humans are creatures of habit.
if you want to sell precious metal online to retail punters then you have to bang on about how the world is going to end and only gold can save the mentally frail, broken punter who ends up sending what money they have to the company.
onetwothreefour said:
petrolbloke said:
My fixed rate deal with Barclays is coming to an end soon so I've been having a look at my options for remortgaging (first time I've had to do this)
Looking at a 30 year term with <60% LTV. I'm thinking of fixing for another 5 years. From what I can tell I think it'll work out better to take one with a product fee and add that to the balance of the mortgage - typical fees are ~£1000 and over the 5 years the increase in monthly payments totals significantly less than that.
Just quoting this bit: sure, the total extra paid over 5 years will be <£1000, but the difference in the balance at the end, plus the extra payments will be >£1000. I think you are assuming that at the end of 5 years you will be in the same position either way.Looking at a 30 year term with <60% LTV. I'm thinking of fixing for another 5 years. From what I can tell I think it'll work out better to take one with a product fee and add that to the balance of the mortgage - typical fees are ~£1000 and over the 5 years the increase in monthly payments totals significantly less than that.
As with all other comparisons, how to pay the £1000 depends on whether you could do better elsewhere: if you've access to a savings account that you can be certain will pay (net of tax) more than your mortgage rate, stick the £1000 in there, add the £1000 fee to your mortgage, and in the long term you win. If (more likely) you don't, pay the fee up front.
Currently going through the process with Natwest @ 4.20% for 5 years. Monthly payment will be more than I'm paying now but still way way cheaper than renting an equivalent house
Houses are the only financial leverage that most people get involved in.
If you buy a 100,000 pound house with 20% deposit, then yes, you are paying a mortgage on 80K but you also get to benefit from the rise in house prices which - in almost all long term measures - is way above the interest rate you are paying.
So once you pay off your mortgage you benefit from house price inflation, but you no longer benefit from leverage…..that is, you could probably afford a mortgage on a property much more expensive than your current property and do the same leverage trick again.
There is nothing wrong with paying off a mortgage and being debt free, it is a wonderful situation to be in. But it is not the only option.
If you buy a 100,000 pound house with 20% deposit, then yes, you are paying a mortgage on 80K but you also get to benefit from the rise in house prices which - in almost all long term measures - is way above the interest rate you are paying.
So once you pay off your mortgage you benefit from house price inflation, but you no longer benefit from leverage…..that is, you could probably afford a mortgage on a property much more expensive than your current property and do the same leverage trick again.
There is nothing wrong with paying off a mortgage and being debt free, it is a wonderful situation to be in. But it is not the only option.
CharlesElliott said:
Houses are the only financial leverage that most people get involved in.
If you buy a 100,000 pound house with 20% deposit, then yes, you are paying a mortgage on 80K but you also get to benefit from the rise in house prices which - in almost all long term measures - is way above the interest rate you are paying.
So once you pay off your mortgage you benefit from house price inflation, but you no longer benefit from leverage…..that is, you could probably afford a mortgage on a property much more expensive than your current property and do the same leverage trick again.
There is nothing wrong with paying off a mortgage and being debt free, it is a wonderful situation to be in. But it is not the only option.
Yes, I have often thought that I should have borrowed the max and kept doing it to later enjoy the leveraged final value before down-sizing.If you buy a 100,000 pound house with 20% deposit, then yes, you are paying a mortgage on 80K but you also get to benefit from the rise in house prices which - in almost all long term measures - is way above the interest rate you are paying.
So once you pay off your mortgage you benefit from house price inflation, but you no longer benefit from leverage…..that is, you could probably afford a mortgage on a property much more expensive than your current property and do the same leverage trick again.
There is nothing wrong with paying off a mortgage and being debt free, it is a wonderful situation to be in. But it is not the only option.
CharlesElliott said:
Houses are the only financial leverage that most people get involved in.
If you buy a 100,000 pound house with 20% deposit, then yes, you are paying a mortgage on 80K but you also get to benefit from the rise in house prices which - in almost all long term measures - is way above the interest rate you are paying.
So once you pay off your mortgage you benefit from house price inflation, but you no longer benefit from leverage…..that is, you could probably afford a mortgage on a property much more expensive than your current property and do the same leverage trick again.
There is nothing wrong with paying off a mortgage and being debt free, it is a wonderful situation to be in. But it is not the only option.
Yup. The flip side is that were the asset value to be deemed to have fallen by 20% by a third party entity employed by the lender then the holder of that leveraged trade will have to find a new margin deposit or take a reaming via a forced sale or a a default rate funding charge going forward. Even just the smallest of write downs can trip the client into having to pay a higher funding rate. If you buy a 100,000 pound house with 20% deposit, then yes, you are paying a mortgage on 80K but you also get to benefit from the rise in house prices which - in almost all long term measures - is way above the interest rate you are paying.
So once you pay off your mortgage you benefit from house price inflation, but you no longer benefit from leverage…..that is, you could probably afford a mortgage on a property much more expensive than your current property and do the same leverage trick again.
There is nothing wrong with paying off a mortgage and being debt free, it is a wonderful situation to be in. But it is not the only option.
The key is, as always balance. Paying off the mortgage as quickly as possible isn't always the best thing to be doing with the spare income being earned. Likewise, using it for more leverage and not using it to get to a point of safety is also rarely a wise move.
FTBs have had years of asset inflation working its magic on their LTV for them while they sleep so the risk of a low deposit on a short term debt where the lender ultimately gets to decide the value of the asset have been negated. That market is very much over and there is a very overt and clear deposit risk now present and anyone with a high LTV should be focussing on putting funds aside to protect themselves from that risk.
Personally, if I were back to being in that area of my life again I probably wouldn't be paying down the mortgage directly by putting excess income over to the lender but rather I'd be putting that money aside where I retained 100% control and ownership and I would be pot building as rapidly as possible to the detriment of all other non essential spending until I had a separate pot that guaranteed I wasn't at risk of being a lender's b
h. Once I had that pot to protect me and my home from valuation risk, lender risk, employment risk, I'd then pay down directly to the lender until I was under that 60% figure at which point you can genuinely make decisions as to whether to run the leverage in exchange for lifestyle benefits or even sensible investment opportunities in a low risk, low stress environment.
Gassing Station | Finance | Top of Page | What's New | My Stuff