Mortgage questions
Discussion
Hi, new poster here and need some advice.
Current mortgage deal is coming to an end, have been overpaying on a fixed mortgage (2yr deal) with the goal to make life easier in the long run. Mortgage is down to 38% with 20 years left to run.
In the current climate there are 10 yr fixed deals but on the other hand dirt cheap variable rates. How much do we think rates are going to creep up over the next 2 years. Is it worth going with a variable rate (less interest being paid - more capital being paid back) continue with the overpayments or fix for a longer term?
Have been moving every 2 years to make sure on the best plan at any given time, but with the newer 10 yr fixed being offered (and the potential for my current overpayment if continued clearing the mortgage within the ten years) is it the 'safer' option?
Any advice is appreciated. Thanks.
Current mortgage deal is coming to an end, have been overpaying on a fixed mortgage (2yr deal) with the goal to make life easier in the long run. Mortgage is down to 38% with 20 years left to run.
In the current climate there are 10 yr fixed deals but on the other hand dirt cheap variable rates. How much do we think rates are going to creep up over the next 2 years. Is it worth going with a variable rate (less interest being paid - more capital being paid back) continue with the overpayments or fix for a longer term?
Have been moving every 2 years to make sure on the best plan at any given time, but with the newer 10 yr fixed being offered (and the potential for my current overpayment if continued clearing the mortgage within the ten years) is it the 'safer' option?
Any advice is appreciated. Thanks.
What is the rate for a 10 year fix?
What is the lowest 2 year variable you can get?
Interest rates will go up, but not before Brexit happens, and even after it will take a while for things to sort themselves out. It depends on your attitude to risk, personally I would gamble, go cheap to start with, and worry about any increase in rates next time. If rates do go up over the next 2 years it is unlikely to be by much, and reassess the landscape in 2 years time. You can always fix for longer then if you like.
What is the lowest 2 year variable you can get?
Interest rates will go up, but not before Brexit happens, and even after it will take a while for things to sort themselves out. It depends on your attitude to risk, personally I would gamble, go cheap to start with, and worry about any increase in rates next time. If rates do go up over the next 2 years it is unlikely to be by much, and reassess the landscape in 2 years time. You can always fix for longer then if you like.
If we knew future of interest rate , we would buy the lottery ticket..
You need to do some number crunching with real numbers. What is ur woek situation in terms of stability? Likely to Move house or have children ? These things will affect your abuse to. Move products. Also the cost of another deal in terms of booking fee, valuation etc.. Personally I don't like the idea of 10 year fix. I would go for a tracker if your job is secure and you can possibly leave with increased payments. Alternatively look at 5 year fixed which is available at not too much premium over 2 year deals...
You need to do some number crunching with real numbers. What is ur woek situation in terms of stability? Likely to Move house or have children ? These things will affect your abuse to. Move products. Also the cost of another deal in terms of booking fee, valuation etc.. Personally I don't like the idea of 10 year fix. I would go for a tracker if your job is secure and you can possibly leave with increased payments. Alternatively look at 5 year fixed which is available at not too much premium over 2 year deals...
Thanks for the advice thus far,
Fixed 10 years 2.39%
Variable 2 years 0.84%
Difference in payments is £70 per month.
As a comparitor a 2 year fixed is 0.99%
As to other questions, 1 child. Currently live comfortably but would like to rebalance annual spending, few more holidays new car etc ideally. For reference current age is 28 so could quite happily bin the overpayment and leave the mortgage at 20 years and still be a reasonable age at the end of the mortgage.
Thanks.
Fixed 10 years 2.39%
Variable 2 years 0.84%
Difference in payments is £70 per month.
As a comparitor a 2 year fixed is 0.99%
As to other questions, 1 child. Currently live comfortably but would like to rebalance annual spending, few more holidays new car etc ideally. For reference current age is 28 so could quite happily bin the overpayment and leave the mortgage at 20 years and still be a reasonable age at the end of the mortgage.
Thanks.
So how much does £70 a month mean to you?
Is it worth the peace of mind, or would you rather have £840 a year now, but maybe £840 less in future years if the IR was to go up?
Only you can answer those questions. The change and size of an IR increase are built into the rates, and unless you have an opinion on the market then it essentially comes down to how much peace of mind you want.
Is it worth the peace of mind, or would you rather have £840 a year now, but maybe £840 less in future years if the IR was to go up?
Only you can answer those questions. The change and size of an IR increase are built into the rates, and unless you have an opinion on the market then it essentially comes down to how much peace of mind you want.
Out of interest ... what are the fee's to change mortgages these days (cost in terms of Application / Arrangement / booking fee, valuation etc)???
For example I'm on a good (now unavailable) tracking base rate Mortgage to end of term. Currently overpaying by 50% and expect to have it paid off in 5~6 years (I'm older than you
)
Any benefit in changing rates would be wiped out by the fee's etc for me so I'll stay put.
You jump for a good two year deal now and pay ?? £2k ?? fee's to save £70pm (£1,680 over 2 years) then in two years directly after Brexit & other instabilities then have to get a new mortgage with ??£?? fee's again
Personally I'd take a 5~10 year fixed / tracker and continue to overpay as you are now and continue with your plan to have paid off in the 10 year period.
Of course life will throw you the odd curve ball and you have the option to adjust the overpay (or not) and final payment timescale but at least you wont have new renewal fee's (and knowing banking these are only going to go one way^)
Just my risk adverse advice and I'm not in banking
For example I'm on a good (now unavailable) tracking base rate Mortgage to end of term. Currently overpaying by 50% and expect to have it paid off in 5~6 years (I'm older than you
)Any benefit in changing rates would be wiped out by the fee's etc for me so I'll stay put.
You jump for a good two year deal now and pay ?? £2k ?? fee's to save £70pm (£1,680 over 2 years) then in two years directly after Brexit & other instabilities then have to get a new mortgage with ??£?? fee's again
Personally I'd take a 5~10 year fixed / tracker and continue to overpay as you are now and continue with your plan to have paid off in the 10 year period.
Of course life will throw you the odd curve ball and you have the option to adjust the overpay (or not) and final payment timescale but at least you wont have new renewal fee's (and knowing banking these are only going to go one way^)
Just my risk adverse advice and I'm not in banking
I was looking at products that have little or no fee, but I appreciate your observations. I have been looking at 5 year fixes as a half way house and they seem to be the best compromise.
The five year fix does by me a safety net and the payment is lower than what the current one is. I would look at the difference in my current payment and the "new" payment and add that to my current monthly overpayment. The only concern I have is my new overpayment would take me over the 10% annual overpayment cap and I can't find any 5 year fixes with out this.
I could look at shortening the term to negate this but the higher payment would remove the safety net I currently have, i.e. Change of circumstances or as per the original post I fancy a holiday etc; I just stop the overpayment for 1-3 months.
Any pointer on what mortgage?? 3-5 year fix?
The five year fix does by me a safety net and the payment is lower than what the current one is. I would look at the difference in my current payment and the "new" payment and add that to my current monthly overpayment. The only concern I have is my new overpayment would take me over the 10% annual overpayment cap and I can't find any 5 year fixes with out this.
I could look at shortening the term to negate this but the higher payment would remove the safety net I currently have, i.e. Change of circumstances or as per the original post I fancy a holiday etc; I just stop the overpayment for 1-3 months.
Any pointer on what mortgage?? 3-5 year fix?
I am not recommending but we recently took put 5 year fixed with Coventry at 1.99%. Mortgage had very little upfront fees (can't remember exact but think it was around £400) and No early repayment charge at all.
No idea if that product is still available but easily check on their website.
They were good to deal with as well. We had a straightforward case with permanent employed less than 60% LTV. After submitting application, got offer in less than 36 hours so quite good. Also have called them few times after mortgage and good customer service.
Good luck.
No idea if that product is still available but easily check on their website.
They were good to deal with as well. We had a straightforward case with permanent employed less than 60% LTV. After submitting application, got offer in less than 36 hours so quite good. Also have called them few times after mortgage and good customer service.
Good luck.
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