Re-mortgage now or wait?

Re-mortgage now or wait?

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Discussion

bobski1

Original Poster:

1,763 posts

103 months

Wednesday 28th September 2022
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it's very reactionary at the moment which is why I am cautious not to lock in too early just in case something does change. The record of this gov has been to rule by reaction and this mini budget has not gone down well with anybody except the already rich. If I lock in & they U-turn I could be over-paying on a rate which I could get lower, alternatively I could lock in a rate which is a 1-2% lower.

Evolved

3,553 posts

186 months

Wednesday 28th September 2022
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Aiminghigh123 said:
I didn’t think you could switch to interest only now unless you are a landlord?
Let’s see what lenders say about it when the other option is defaulting. The sharp rise in rates and over commitment by a lot of people mean many are on a knife edge already.


gotoPzero

17,122 posts

188 months

Wednesday 28th September 2022
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I think some people will be bitten by prices dropping too.

Its all fine and dandy when prices are going up and you want to remortgage but if the bank say your house is worth 25% less than you paid and you are only 2 years into your mortgage you are going to have a lot of problems.


wombleh

1,778 posts

121 months

Wednesday 28th September 2022
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Can’t see rates going down, so about to pay an early repayment charge to remortgage onto something more expensive. Rolling the dice that it’ll be better to do that now than in 8 months when our mortgage ends.

Edible Roadkill

1,687 posts

176 months

Wednesday 28th September 2022
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Any of the mortgage brokers in here able to answer.

Mortgage overpayment facility:

If I overpaid to max this out right now, when does the limit reset to be overpaid again?. Is it annual January-January or is it linked to the month the product agreement was drawn up e.g March-March.

Nationwide if it matters.

Just having a look at what Ive got in front of me, because I’ve been with current lender since 2014, happily swapping on new deals, my overpayment limit is 10% of the original loan.

Edible Roadkill

1,687 posts

176 months

Wednesday 28th September 2022
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wombleh said:
Can’t see rates going down, so about to pay an early repayment charge to remortgage onto something more expensive. Rolling the dice that it’ll be better to do that now than in 8 months when our mortgage ends.
I’m thinking likewise on a 9.5yr term left, I think it’s wise now to overpay to make half the current loan vanish then fix the remainder for 5yrs to pay the rest sooner instead of 9. Payments stays similar & Interest wise I pay much much less, obviously savings won’t accrue interest but that’s fine & im not leaving myself short in doing so.

Now that the cheap moneys vanishing the want to be mortgage free is massive!


Edited by Edible Roadkill on Wednesday 28th September 09:11

Sheets Tabuer

18,898 posts

214 months

Wednesday 28th September 2022
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I completed last week, luckily I managed to bag a 5 year deal @ 2.9%.

I had a sigh of relief knowing this madness isn't going to bother me for 5 years so one less thing to worry about.

Aiminghigh123

2,720 posts

68 months

Wednesday 28th September 2022
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Evolved said:
Aiminghigh123 said:
I didn’t think you could switch to interest only now unless you are a landlord?
Let’s see what lenders say about it when the other option is defaulting. The sharp rise in rates and over commitment by a lot of people mean many are on a knife edge already.
Yeah agree but all models are saying house prices will drop. They don’t care if you’re homeless they just want your money. Trust me I married a banker she doesn’t let me spend anything on myself. Lol

Puzzles

1,784 posts

110 months

Wednesday 28th September 2022
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I’ve been offered interest only deals but not sure how mainstream it is.

jonwm

2,504 posts

113 months

Wednesday 28th September 2022
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My fixed rates (1.89%) ends in March 2023, I'm hesitant on doing a 6 month early deal on the basis that I gambled with not locking into an energy deal in may of this year which has paid dividends in the end. I feel there is lots of panic and it may be the wrong decision but will see what comes out in the wash.

If they keep rising like the DM and GMB are saying they will, only people on £100k+ household incomes will be able to afford a house, I agree we have all had some good times with the rates but I cant see with house prices as high as they are & combined with huge energy increases that anyone will be in one in a few years time, most will be repossessed.

I use Nationwide as benchmark and the best fix today is 5.54% for my circumstance, just impossible to budget for that rise, 17th March after the first rise it was 2.14% just crazy.

dingg

3,974 posts

218 months

Wednesday 28th September 2022
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bobski1 said:
it's very reactionary at the moment which is why I am cautious not to lock in too early just in case something does change. The record of this gov has been to rule by reaction and this mini budget has not gone down well with anybody except the already rich. If I lock in & they U-turn I could be over-paying on a rate which I could get lower, alternatively I could lock in a rate which is a 1-2% lower.
Do you seriously think that the boe will be cutting rather than raising rates?

Evolved

3,553 posts

186 months

Wednesday 28th September 2022
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Aiminghigh123 said:
Evolved said:
Aiminghigh123 said:
I didn’t think you could switch to interest only now unless you are a landlord?
Let’s see what lenders say about it when the other option is defaulting. The sharp rise in rates and over commitment by a lot of people mean many are on a knife edge already.
Yeah agree but all models are saying house prices will drop. They don’t care if you’re homeless they just want your money. Trust me I married a banker she doesn’t let me spend anything on myself. Lol
Haha, she’s sounds ruthless. Lenders won’t force a default if they can help it, extension of term or swapping to interst only will always be suggested first before eviction and repossession.

skinnyman

1,632 posts

92 months

Wednesday 28th September 2022
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We owe £142k, 18yrs left, paying £770/mth @ 2.19%.

ERC = £2800
Can fix for 5yrs @ 4.74%, which is £1000/mth. Over 5yrs thats £60k + the £2800 ERC, so £62830

Staying put we pay £9240 this year, then it jumps to £14000 for the next 4yrs, based on 8%, and a static 8% for the next 4yrs.

The difference between the 2 is around £2.5k, not worth it IMO, especially as that saving is only realised if we're paying 8% from the end of 2023 to 2027, which I doubt we will be.

I'm going to increase overpayments now, then roll the dice come Dec 2023. One thing is for sure, unless we inherit £150k+ we won't be moving house next year.

A.J.M

7,893 posts

185 months

Wednesday 28th September 2022
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Raymond Reddington said:
A.J.M said:
My renewal is due in January.
Was hoping it would be less than the 3.42% we are currently on, but that doesn’t look likely now.
You should consider locking in a new deal now if you can, it's looking like today's deals are the best you may get for some time.
Going to email the broker who got us the mortgage and get the ball rolling to see what’s our best option.

Timing for anything doesn’t seem to be going our way just now. Typical hehe

Malcolm E Boo

192 posts

71 months

Wednesday 28th September 2022
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Edible Roadkill said:
Any of the mortgage brokers in here able to answer.

Mortgage overpayment facility:

If I overpaid to max this out right now, when does the limit reset to be overpaid again?. Is it annual January-January or is it linked to the month the product agreement was drawn up e.g March-March.

Nationwide if it matters.

Just having a look at what Ive got in front of me, because I’ve been with current lender since 2014, happily swapping on new deals, my overpayment limit is 10% of the original loan.
In my case it is December to December, which is when the time of year when this current fix started.

Halitosis

153 posts

56 months

Wednesday 28th September 2022
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Edible Roadkill said:
Any of the mortgage brokers in here able to answer.

Mortgage overpayment facility:

If I overpaid to max this out right now, when does the limit reset to be overpaid again?. Is it annual January-January or is it linked to the month the product agreement was drawn up e.g March-March.
I'm no mortgage broker, but am confident my vanilla mortgage has the yearly periods starting and ending on the anniversary of the mortgage commencement. ERCs are also based on such

robertfleckney

61 posts

140 months

Wednesday 28th September 2022
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I was in the same predicament in April. My (then) 5 year fix (1.99%) ended Feb ‘23 and I was watching rates creeping up and thinking about what to do. Everything I read online predicted a gradual increase in interest rates, meaning I’d be paying much more come re-mortgage time. I decided to pay the £1300 ERC and fix with nationwide at 2.24% for another 5 years. Then, the calculations I was doing was based on rates hitting 3% by October ‘22, which was the point my current lender would let me re-mortgage (Nationwide).

I am VERY glad I did, as the best deal I could get with Nationwide now would be 4.44% (5 year fix). Now I can continue overpaying and not using that for repayments.

My advice is to use the online mortgage comparison calculators (money saving expert). I calculated a ~£9k saving over 5 years based on 4.44%.

Itsallicanafford

2,759 posts

158 months

Wednesday 28th September 2022
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At some point, tracker mortgages will come back into play. Back in 2008 we took out a .79% over base tracker when rates were about 4.5% ish from memory. We rode that puppy all the way down until Nov 2021 when rates were 0.1% so paying 0.89%. At that point we fixed for 5 years on 1.29%. My point is come late 2023/2024 rates will be high but might repeat the same cycle down which brings trackers into play.

Colossal_Squid

11 posts

87 months

Thursday 29th September 2022
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MrJuice said:

For those on repayment, surely the answer to high renewal rates is to switch to interest only and hope rates fall..?

6% on IO equates to £500/month for every 100k you have left to pay
______________________________________________________________________________
I didn’t think you could switch to interest only now unless you are a landlord?
______________________________________________________________________________

You can get products that are a combination of interest only and renewal. Usually the interest only portion can be up to 50% of the property value. This could be very useful for those looking to keep the monthly payments down and ride out the volatility. You'll still be able to over pay if you find you have extra cash (if the product allows overpayments).

Also, if you lock in a rate now, 6 months ahead the end of a current fixed rate deal, you can always back out of it if a better deal comes along before you actually switch.

Personally, I think interest rates are only going to go one way https://www.youtube.com/watch?v=vjD3EVC1-zU

WonkeyDonkey

2,333 posts

102 months

Thursday 29th September 2022
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I was trying to work out whether to switch, current deal runs out in August 23. ERC of £723, HSBC were offering 3.92% for existing customers on a 5 year fix.

Presumably at midnight they've now upped it to 5.29%.

Guess I'll just ride it out now and hope things a bit better next year.....