Just a little Financial advice please...
Discussion
Just a quick one chaps (and chappesses)
My fixed rate mortgage is due to run out this June, it's currently more than manageable yet will jump around £300 or so when the rate runs out, this too will be manageable but slightly less so...
Now, my "run-in" rate is to be 1.990% above the BOE base rate, at the time of signing on the line this would have meant a rate of 7.7% at the time of taking the loan.
However seeing as the BOE base rate is now 2% (after a quick google, but please correct me if I'm wrong!) my rate will be 3.9% and my payments will go down.
Does that make sense? seeing as not many lenders are offering rates quite as low as that. Or am I actually going to benefit from this "Credit Crunch"?
Can't see anything in the small print that says I must pay ridiculously high rates, and no mimimum rate is set for payment.
So, is it too good to be true, or will I really save money in June? (rates being the same and all that...)
My fixed rate mortgage is due to run out this June, it's currently more than manageable yet will jump around £300 or so when the rate runs out, this too will be manageable but slightly less so...
Now, my "run-in" rate is to be 1.990% above the BOE base rate, at the time of signing on the line this would have meant a rate of 7.7% at the time of taking the loan.
However seeing as the BOE base rate is now 2% (after a quick google, but please correct me if I'm wrong!) my rate will be 3.9% and my payments will go down.
Does that make sense? seeing as not many lenders are offering rates quite as low as that. Or am I actually going to benefit from this "Credit Crunch"?
Can't see anything in the small print that says I must pay ridiculously high rates, and no mimimum rate is set for payment.
So, is it too good to be true, or will I really save money in June? (rates being the same and all that...)
That's not a bad idea, but I'm going to find out a realistic estimate of the payments first I think - if the payment is based on a baserate which is 3% lower than that which I was quoted back at the beginning of the term it should work out cheaper. And If it does I'll just increase my payments to an affordable amount and pay the mortgage off earlier. lovely job.
pimpin gimp said:
That's not a bad idea, but I'm going to find out a realistic estimate of the payments first I think - if the payment is based on a baserate which is 3% lower than that which I was quoted back at the beginning of the term it should work out cheaper. And If it does I'll just increase my payments to an affordable amount and pay the mortgage off earlier. lovely job.
But you can't get that money back. Keeping it in a savings account means that if in 6 months time rates are still low and showing no signs of coming up, then great, either keep saving or use the difference for chicks or drugs. If rates look like they're going to start moving up again then you're in control of your money, not the bank. A missed payment is a missed payment remember, even if you have overpaid.Edited by Olf on Monday 5th January 21:24
Cover your arse mate and get a new deal set up too. You can get re-mortgage offers valid for 6 months now (with no upfront set up costs) and sit on the offer. Most admin fees are only payable on completion.
Deals are drying up everyday and you can stay on the +1.99% rate for a period but when the rates go back up don't leave yourself in a corner, especially as prices are dropping fast and the valuers are knocking down prices (and equity) all the time.
The best deals are up to 60% loan to value. Then 75%, then 90%...
If your house is in the 60% band now, great, but if it drops down then your choices will be restricted later in the year.
When the fix rates come down a tad, jump on quick. Are we not at a 50-60 year low on Bank Base Rate?
Deals are drying up everyday and you can stay on the +1.99% rate for a period but when the rates go back up don't leave yourself in a corner, especially as prices are dropping fast and the valuers are knocking down prices (and equity) all the time.
The best deals are up to 60% loan to value. Then 75%, then 90%...
If your house is in the 60% band now, great, but if it drops down then your choices will be restricted later in the year.
When the fix rates come down a tad, jump on quick. Are we not at a 50-60 year low on Bank Base Rate?
pimpin gimp said:
Now, my "run-in" rate is to be 1.990% above the BOE base rate, at the time of signing on the line this would have meant a rate of 7.7% at the time of taking the loan.
However seeing as the BOE base rate is now 2% (after a quick google, but please correct me if I'm wrong!) my rate will be 3.9% and my payments will go down.
Does that make sense? seeing as not many lenders are offering rates quite as low as that. Or am I actually going to benefit from this "Credit Crunch"?
Can't see anything in the small print that says I must pay ridiculously high rates, and no mimimum rate is set for payment.
So, is it too good to be true, or will I really save money in June? (rates being the same and all that...)
Yes, assuming rates are where they are today you will save money when your current fixed comes to an end. However seeing as the BOE base rate is now 2% (after a quick google, but please correct me if I'm wrong!) my rate will be 3.9% and my payments will go down.
Does that make sense? seeing as not many lenders are offering rates quite as low as that. Or am I actually going to benefit from this "Credit Crunch"?
Can't see anything in the small print that says I must pay ridiculously high rates, and no mimimum rate is set for payment.
So, is it too good to be true, or will I really save money in June? (rates being the same and all that...)
As plotloss has pointed out rates are widely expected to fall again on Thursday (by anywhere between 0.25 and 1% depending on which market guru is speaking at the time.)
New rates are begining to be released (2 year fixed at 3,49% for instance) so if you have plenty of equity in your property I would hold off looking for a new mortgage now, some lenders will only do a 3 month mortgage offer and I wouldn't limit your options just yet if i were you.
The only other caveat is to watch the mortgage market like a hawk, rates have dropped like a stone in the last few months. When tha market turns, the BoE could raise rates at the same speed (Not widely expected but definitely possible.)
sleep envy said:
Al, what's the earliest you can get an offer and leave it open?
Currently 6 months, but not all lenders will do this, some only do 3. I'm also seeing lenders who are putting completion deadlines on their best deals.Fixed rates are begining to fall, but very slowly, HBOS brought new rates out at the very end of last week. A&L brought some out today.
sleep envy said:
ta
Effectively yes, but whereas with a normal offer you can string out the application process to delay the offer being produced and then have 6 months from the date of offer, with a defined completion the latest completion date is set in stone prior to application. Make sense?scotal said:
I'm also seeing lenders who are putting completion deadlines on their best deals.
isn't that the same thing as a timescale on an offer?[quote=scotal
Yes, assuming rates are where they are today you will save money when your current fixed comes to an end.
As plotloss has pointed out rates are widely expected to fall again on Thursday (by anywhere between 0.25 and 1% depending on which market guru is speaking at the time.)
New rates are begining to be released (2 year fixed at 3,49% for instance) so if you have plenty of equity in your property I would hold off looking for a new mortgage now, some lenders will only do a 3 month mortgage offer and I wouldn't limit your options just yet if i were you.
The only other caveat is to watch the mortgage market like a hawk, rates have dropped like a stone in the last few months. When tha market turns, the BoE could raise rates at the same speed (Not widely expected but definitely possible.)
[/quote]
Thanks for your help, much appreciated.
Yes, assuming rates are where they are today you will save money when your current fixed comes to an end.
As plotloss has pointed out rates are widely expected to fall again on Thursday (by anywhere between 0.25 and 1% depending on which market guru is speaking at the time.)
New rates are begining to be released (2 year fixed at 3,49% for instance) so if you have plenty of equity in your property I would hold off looking for a new mortgage now, some lenders will only do a 3 month mortgage offer and I wouldn't limit your options just yet if i were you.
The only other caveat is to watch the mortgage market like a hawk, rates have dropped like a stone in the last few months. When tha market turns, the BoE could raise rates at the same speed (Not widely expected but definitely possible.)
[/quote]
Thanks for your help, much appreciated.
Gassing Station | The Pie & Piston Archive | Top of Page | What's New | My Stuff