7 year Fixed Offset Mortgage - Good or Bad thing?
Discussion
I'm considering going with a 7 year Fixed Offset Mortgage @ 3.84% with The Chelsea BS, having just finished a 5 year fix with Northern Rock @ 5.59% (seemed like a good idea at a time of volatility), only thing I don't like is the SVR of 5.79% when we come off the fix a full 1% higher than I'm paying atm for my SVR. With a 5 year fix at exactly the same rate 3.84%, an extra two years of stability sounds like a good thing to me.
What does everyone else think? Their are hefty charges to pay back if you want to move mortgage company, but I'm told it is portable, not that I have any intention of moving.
What does everyone else think? Their are hefty charges to pay back if you want to move mortgage company, but I'm told it is portable, not that I have any intention of moving.
I'd be happy fixing at that rate, but it depends on your finances as much as anything. Whether its a good deal is impossible to tell without knowing the LTV you're looking at though. Offset is great if you can afford to overpay a lot as it gives massive flexibility for you to define your own repayment model.
Unless you have a crystal ball, you can have no idea what any mortgage providers svr is going to be when you come off the fixed rate, just because it isn't competitive now doesn't mean it won't be in 7 years, and just because another providers is competitive now, doesn't mean it will be in 7 years or even next year.
Lots of people get no choice regarding staying on SVR, if they have messed up their credit rating, changed jobs, are in negative equity etc. The SVR for Halifax and RBS recently going up to 4% from 3.5% was not at all bad as these things go, certainly better than my 4.79%.
Inertia to getting up and changing things and getting a new deal is another reason, which is why I'm looking for the longest time possible for my next deal & working out the pros and cons of deals.
Inertia to getting up and changing things and getting a new deal is another reason, which is why I'm looking for the longest time possible for my next deal & working out the pros and cons of deals.
im on SVR of 2.5% ....they always make money on fixed rates, thats the idea, they take the risk and you pay a premium, but the odds are stacked in their favour always, they will only offer a fix on whatever they think they can make money on
if you need the security of a fixed rate then go for it, but understand you are usually worse off over time
if you need the security of a fixed rate then go for it, but understand you are usually worse off over time
tali1 said:
Although you have to pay fees - it is still worth it never to stay on SVR -i can't see why anyone would want to stay on SVR.
Right now, it´s much cheaper on the SVR at 2.5% than taking out a fixed and there is little sign of an immediate increase in rates. I´ll be sticking it out for some time until there is a change in the outlook for interest ratesbogie said:
im on SVR of 2.5% ....they always make money on fixed rates, thats the idea, they take the risk and you pay a premium, but the odds are stacked in their favour always, they will only offer a fix on whatever they think they can make money on
if you need the security of a fixed rate then go for it, but understand you are usually worse off over time
Is that with the Nationwide? if you need the security of a fixed rate then go for it, but understand you are usually worse off over time
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