Re-mortgage now or wait?
Discussion
WonkeyDonkey said:
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.....
Wow. Was looking at those yesterday, you’re right. Was surprised they were still offering 3.92% this late. That’s a hell of a rise. 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.....
That’s for 60% LTV, too. I have the exact same product (5 years, no fee) and fixed earlier this year for 2.49%. Earlier still in the year I think it might have been 2% or thereabouts.
Think some HSBC products got as low as 1.09% at one point!
mk2driver said:
My current fixed deal ends Sep 24 and is at 2.19% at the moment
I’m holding tight until then hoping that we will have passed the peak and be on the way down
Clearly this may not happen but paying a large ERC and upping the payments by a huge chunk right now seems like it may not pay off for me
Also gives me two years to get even tighter on the overall household budget in order to make that rise less impactful
Gives you 2 yrs to overpay as much as possible so your renewal is as low as possible. I’m holding tight until then hoping that we will have passed the peak and be on the way down
Clearly this may not happen but paying a large ERC and upping the payments by a huge chunk right now seems like it may not pay off for me
Also gives me two years to get even tighter on the overall household budget in order to make that rise less impactful
Edited by Douglas Quaid on Thursday 29th September 06:39
bobski1 said:
Also how the hell can I have paid over £60k and only have the amount drop by £30k? The amount of money these banks make is sickeningAgree with other posts banks withdrawing rates is them making money vs making even more money when they put the rates up with the new products.
20:53[/footnote]
Interest rates have been absolutely peanuts for over a decade and they are now slowly approaching where they have always been - let alone the days of 7-10%20:53[/footnote]
They are not making loads of money - it’s just the realisation that interest has to be paid on large loans and there’s almost a generation now who haven’t experienced that.
I suggest you look at the overpayment calculators because that’s what’s going to save you money rather than endless leap frogging between mortgage providers every two years (which IS the merry go round that makes money and activity for everyone apart from the consumer)
Part of me is really annoyed at myself as I checked in Feb and the ERC was not that much higher, regret not fixing for another 5 years then and just sucking it up back then
Maybe my sums aren't right but currently on 2.44%, going to 3.5% my payments only increased by 173, does that sound right?
Maybe my sums aren't right but currently on 2.44%, going to 3.5% my payments only increased by 173, does that sound right?
Edited by bobski1 on Thursday 29th September 08:47
bobski1 said:
Maybe my sums aren't right but currently on 2.44%, going to 3.5% my payments only increased by 173, does that sound right?
Nobody can answer that question without knowing your balance and term. You mentioned you had a broker previously, fire these questions and concerns to them, thats what they are for. Edited by bobski1 on Thursday 29th September 08:47
I remortgaged in Dec last year. As we were hoping to move in 2023 my broker talked me out of a 5 year fix at 1.09% and into a variable at .75% above base so we had some flexibility. I’ve been trying to ignore the rises and ride it out as it’s only £20 rise per .25 increase but the constant media coverage this week has had me quite stressed about where thing could go (and where I could have been on a 1.09 fix!!)
I emailed my broker at 10am yesterday to see what the options were to fix with our existing lender, Barclays. He called back at 14:00 and was able to quote in about 3 mins as he had all our info. I was staggered they were still offering a 5 year fix at 3.15% (2 year was 3.19%) which is only .15% more than the current variable. I went with the 5 year and he had the whole application done and accepted within about 10 mins.
We’re fixed at about £200p/m more than if we’d done it in Dec, so a £12k mistake over 5 years but the landscape was dramatically different back then. I’m actually feeling quite lucky now as rates seem to have risen since yesterday.
I emailed my broker at 10am yesterday to see what the options were to fix with our existing lender, Barclays. He called back at 14:00 and was able to quote in about 3 mins as he had all our info. I was staggered they were still offering a 5 year fix at 3.15% (2 year was 3.19%) which is only .15% more than the current variable. I went with the 5 year and he had the whole application done and accepted within about 10 mins.
We’re fixed at about £200p/m more than if we’d done it in Dec, so a £12k mistake over 5 years but the landscape was dramatically different back then. I’m actually feeling quite lucky now as rates seem to have risen since yesterday.
Edited by duff on Thursday 29th September 10:04
I can’t afford our (upfront in cash) ERC, we are due to re-fix next October. Currently on a 5 year fixed at just under 2.4% paying £520 with £141k left over 33 years. I’ve worked out if it goes above £900 a month we simply can’t afford it. As no one knows, I guess I’ll just be one of those that waits and hopes…
W201_190e said:
I can’t afford our (upfront in cash) ERC, we are due to re-fix next October. Currently on a 5 year fixed at just under 2.4% paying £520 with £141k left over 33 years. I’ve worked out if it goes above £900 a month we simply can’t afford it. As no one knows, I guess I’ll just be one of those that waits and hopes…
So overpay now at £900 at a low interest rate rather than kick the can down the road waiting for better times - which i’m afraid to say have gone noweliot said:
W201_190e said:
I can’t afford our (upfront in cash) ERC, we are due to re-fix next October. Currently on a 5 year fixed at just under 2.4% paying £520 with £141k left over 33 years. I’ve worked out if it goes above £900 a month we simply can’t afford it. As no one knows, I guess I’ll just be one of those that waits and hopes…
So overpay now at £900 at a low interest rate rather than kick the can down the road waiting for better times - which i’m afraid to say have gone noweliot said:
do it now at 2.4% or do it later at 4%+ ?
If you can, then do it now when it’s most beneficial to you.
Or stash it away in a fixed 1 year account that pays nearly 4% and use it to reduce the amount borrowed next year when renewing, with the benefit of being able to access it in a year should circumstances change?If you can, then do it now when it’s most beneficial to you.
Either way, like your alluding to, doing nothing is probably the worst thing to do as you only end up doing it later at a greater cost
I'm a mortgage noob - One year into our first mortgage (25 years).
We initially fixed for 2 years.
How does it work come the end of our fixed period in October 2023?
Assuming we look to change lender to a more competitive deal, does the house get re-valued by whichever lender we decide to go with?
We bought the house for substantially under market price for various reasons, and realistically it'll be worth 50% more than we paid.
On that basis I'd assume our LTV would become much more attractive, so we'd be offered better rates than we initially were on 90% LTV?
Naturally interest rate rises will probably negate all of that, but just wanting an idea on how different things could be come the end of the fixed period.
Any advice is much appreciated
We initially fixed for 2 years.
How does it work come the end of our fixed period in October 2023?
Assuming we look to change lender to a more competitive deal, does the house get re-valued by whichever lender we decide to go with?
We bought the house for substantially under market price for various reasons, and realistically it'll be worth 50% more than we paid.
On that basis I'd assume our LTV would become much more attractive, so we'd be offered better rates than we initially were on 90% LTV?
Naturally interest rate rises will probably negate all of that, but just wanting an idea on how different things could be come the end of the fixed period.
Any advice is much appreciated
Sycamore said:
I'm a mortgage noob - One year into our first mortgage (25 years).
We initially fixed for 2 years.
How does it work come the end of our fixed period in October 2023?
Assuming we look to change lender to a more competitive deal, does the house get re-valued by whichever lender we decide to go with?
We bought the house for substantially under market price for various reasons, and realistically it'll be worth 50% more than we paid.
On that basis I'd assume our LTV would become much more attractive, so we'd be offered better rates than we initially were on 90% LTV?
Naturally interest rate rises will probably negate all of that, but just wanting an idea on how different things could be come the end of the fixed period.
Any advice is much appreciated
Simple advise is to overpay by as much as you can afford to. Don’t look at that 25yrs literally and never take the current low finance rate for granted as if is it’ll always be there. We initially fixed for 2 years.
How does it work come the end of our fixed period in October 2023?
Assuming we look to change lender to a more competitive deal, does the house get re-valued by whichever lender we decide to go with?
We bought the house for substantially under market price for various reasons, and realistically it'll be worth 50% more than we paid.
On that basis I'd assume our LTV would become much more attractive, so we'd be offered better rates than we initially were on 90% LTV?
Naturally interest rate rises will probably negate all of that, but just wanting an idea on how different things could be come the end of the fixed period.
Any advice is much appreciated
It sounds like you are in a great position through the valuation, but that could take a bit of a battering by next autumn if things move the way they look likely to go. Previous recessions have seen corrections up to 25% in some cases.
I started a 25yr term in 2014, I’ve managed to get that reduced to 9.5yrs remaining. Due to the rates increasing and substantial savings held I am now looking to make the remaining mortgage balance disappear as fast as possible. I could do so now tbh but it would leave finances a bit close to the bone, I think 3yrs is my target. Thats utilising my full 20% overpayment allowance. Mortgage will be paid in full in around half the original term.
The Ferret said:
eliot said:
do it now at 2.4% or do it later at 4%+ ?
If you can, then do it now when it’s most beneficial to you.
Or stash it away in a fixed 1 year account that pays nearly 4% and use it to reduce the amount borrowed next year when renewing, with the benefit of being able to access it in a year should circumstances change?If you can, then do it now when it’s most beneficial to you.
Either way, like your alluding to, doing nothing is probably the worst thing to do as you only end up doing it later at a greater cost
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