Re-mortgage now or wait?

[bobski1]

I have a 5yr fixed which is due to end September next year. I should have around 240k left at that point but that is without overpayments. I plan on increasing them to around £200/month from this month to help bring the balance down as much as I can until the rate ends.

Given what is going on with rates at the moment I am curious what people think to paying a fee to end the mortgage now and fix again for 5-10yrs and hope to save that fee by paying the lower rate vs waiting till June next year which is when I can sort out a new rate.

[bobski1]

Got to sit down tonight and get the exact numbers based on what I have left. If my estimates are right I should have an <60% LTV so that would work in favour of a better rate.

If it is 6 months out to lock in a new rate then I only have 6 months until then but as we have seen a lot can happen in that time frame hence why I want to try lock something in sooner.

[bobski1]

doing a quick deal checker the rates & deals I can get I would be paying similar to what I pay now so I wouldn't get much of the fee I would have to pay back over the next 2-5yrs however if the rates were to increase and I lock in now/soon then I could potentially save a lot of money each month but that is a huge IF and also depending on what the rates are.

2yr I can get rates of around 2%, 5-10yrs I am looking at 2.8% and really it is a question will the rate increase much in the next 6 months as 4% would see monthly payments increase by £150.

This does also highly depend on the LTV (I've just checked on zoopla & gone in the middle of the estimated price) but if the market crashes then again locking in now would be in my favour for the better rate. When going through re-mortgage process does the new lender do full surveys/valuations again or would it be a desktop study?

[bobski1]

Been a late one but need to call the broker tomorrow to see what rates he can locked in. I think given the risk to housing market and the change of more and more rate rises fixing now will be slightly more expensive in the short term but will save money going forward. Although fixing 3-4%, can people see the rates going higher than that?

[bobski1]

when going through a re-mortgage, how does the lender calculate the value of the house? Zoopla figures seem to be in our favour but if the lender thinks its less then of course go to adjust my calculations.

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 sickening. Agree 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.

Edited by bobski1 on Tuesday 27th September 20:53

[bobski1]

Would people risk locking in a rate for 5 or 10yrs? a lot has changed in the last 5 years but going 10yrs there is a risk of being locked into a rate which is higher than the rate but I can't see that happening

[bobski1]

whats the difference between a fixed and a variable rate that is fixed for X months?

[bobski1]

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.

[bobski1]

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?

Edited by bobski1 on Thursday 29th September 08:47

[bobski1]

How are people getting things done so quickly? Had a chat with Barclays and they gave me a good rate but I have a call next week and then with the mortgage advisor the following week.

My broker is away so his partner needs me to go through all the details again before searching and applying, seems to be very long

[bobski1]

crxdave said:

Is there any scenario where waiting out until next year would pay off? Current 2yr fix ends June 2023, looking at a £4k ERC and a £600pm increase if we remortgage now

I don't think anybody can give you that answer, they have done a u-turn on it but the damage has already been done for rates. I think they were going to go up slowly anyway but perhaps not as sharply as initially thought.

Ultimately you are betting against what a new fixed rate now vs in your new deal. If it ends Jun 2023 then you can lock in 3-6months before hand, will rates increase that much in 3 months till the end of the year?

and if you did lock in now can you afford the ERC and the increase?

[bobski1]

I think I've had a setback. Thought I was due to lock in at 3.3% but still waiting for the call, due to ERC I couldn't do it online but reading of some people not getting what was previously agreed.

Thinking they may now offer 4-5%. Which then becomes, is it worth to stay on fixed till next sept & risk it for a chocolate biscuits that the rates will be fairly similar or will even 4-5% seem like a dream in 6mth-1yr time.

I'm leaning towards the latter but may as well stick to the lower rate for as long as possible. I may have to lock if house prices start to fall as the LTV is in my favour at the moment or if the rates start to go higher

Will push to get the 3 & hoping the threat of cancelling all my things with them may persuade them but I doubt it. Any advice?

[bobski1]

Honestly how can people get things so wrong? I understand the world is a complex place but how many times does the government want to shoot itself in the foot and tank the economy? These have got to be making deals and have something else going on, nobody can be this incompetent

[bobski1]

What is the gut feeling from people around the end of month budget. Those in 2-3% just before the spike have done well. Starting to think even 4-5% might seem like a deal come November time?

[bobski1]

T0M said:

I've just paid the heavy ERC with Barclays to refix (From 2% with 12 months to go) at 4.7% for 5 years. I learned this morning they're allowing re-fix rates to start up to 180 days from now, so no outgoings change (Except the ERC) for 6 months, then an increase of £300 p/m.

Who knows what the rates will be by then, but for my circumstances this represents certainty and allows maintenance of existing lifestyle which would be in jeapordy if rates go to 6-7% (or more), so on balance is the right decision for us and am happy with.

Let's hope this thread/post ages well...

I think I am in a similar situation, having been messed about I no longer have access to the 3% rate they initially offered so have a 5% offer. The 3% rate vs 5% over 5yrs would have meant saving the ERC over that time. Now it's 5% I am unsure if the rate is going to go much higher so will most likely use the ERC money to get down to the next LTV bracket and hope for a better rate. I only have a few months left till no ERC so worst case if it does go to pot I can always lock in at the time

[bobski1]

A.J.M said:

Wish I had a crystal ball for this crap.

Best remortgage deal is £157 over current deal.
Up by roughly 1/3rd on a 5 year fixed.
I can back out that deal if better ones come on the market before now and February.

Or.

I go tracker for a bit, an increase of only £35 a month.
Then hope the market calms down and try for a better fixed rate later.

This has now got tougher to decide. Before I think it was easy to lock in a rate with a high confidence the rates are going to shoot up. Now they are up at 5% it's hard to know if they are going to go even higher, drop or level out.

[bobski1]

BoE talking about rate rises in November. Maybe it's time to lock in for those who can?

I don't understand that if the mini budget is reversed why the market wouldn't react and things come down a little. Although if it's like fuel I envisage it going up in a heartbeat & taking months to even move back down

I can see rates of 6-7% coming in soon.

[bobski1]

Frimley111R said:

Anyway, I am sure this is all covered on another thread, back to mortgages...

BoE likely to put rates up again, seems 7% may not be as unrealistic as people think. Maybe the 4-5% will be a the great deals going forward.

I've not locked in yet, awaiting till next year to save the ERC

[bobski1]

Confirmed 0.75% rate increase to 3%. Wondering if this will spike another rate increase or if this has already been priced in.


Of course who are we kidding the banks will use any excuse to increase rates and profits.

[bobski1]

havoc said:

jamiedimonBTClover said:

There are plenty of takers for UK debt. Once corporate defaults start happening (and they will) - I think flight to safety could be a thing.

One thing the UK really suffers with, far too high a proportion of debt issued as inflation linked. It's near 30%. Controlling inflation is an important as capping rates.

I don't see terminal rates beyond GBP 4.5%, and I don't think the BoE wants to go down the path of the the Fed that has openly admitted they are prepared to over tighten; cause a recession then lower rates to stimulate.

Cost of living is going to derail the economy and the impasse with trade unions isn't helping. Even if the hawkish element of the BoE wants to go harder for longer, the backdrop looks too weak. But I stress that as opinion. I think it will be very marginal to predict fix or float - hence I don't think the decision needs to be on a numerical gain, more comfort / headache / stress. Although I do edge towards floating due to history. As rates collapsed in the 00's I just paid at the original higher monthlies and chipped off capital.

Can't argue with any of that.

Only thing I might add is on a float can you lock into a rate if things start to spiral again? For me a float is making more sense for the time being as it is less than the rates with a view to lock in as things start to turn.

I can't see the rates dropping now, my prediction is for them to stay around where they are, enough people have stretched themselves too much and will see some issues over the next 12-24months, this will start to erode the middle class.