don’t rely on the clairvoyant for all financial decisions but that is essentially what the OP is doing if he takes any notice of what’s being said on here .

It really isn’t. The undertone of most posts on here is risk management rather than rates will do Xyz.

There was an article in the FT yesterday about banks etc pushing their mortgage rates up to choke off demand as they can’t cope with the current level of applications!

Based on the last 20 years… they will go down every time I fix for a period! There’s plenty of property changing hands here locally so I don’t see any need / incentive to reducing domestic mortgages. Not a good time to be in Commercial property though.

Commercial property can be a good deal atm….i know of 2 retail premises sell recently yielding 10%. That’s 20k pa on a 200k purchase, clearly theres risk but at 10% its priced in.

In times of uncertainty wealthy people just get wealthier.

purely speculatiuon but i’m hedging my bets on 1980s rapid interest rising once we come out of covid/brexit/whatevershitstorm is next.

I’m not so sure, in the 80s when we first jumped on the property ladder the rate was around 8%, two years later it went up to almost 15%. We almost had to give the keys back to the building society.

At that time interest rates were used as a measure to reducing inflation, high inflation hike the the interest rates and reduce the populations excess cash flow.

The low interest rates have more or less done the same thing. The housing market was used as means of economic growth. People have hocked themselves up to ridiculous high mortgages due to the inflated values of property. It’s because of this I doubt the rates will go up too much. It will break a reasurging economy, the last thing any sane government want to do is have it’s population defaulting on their mortgages and returning the keys.

There was an article in the FT yesterday about banks etc pushing their mortgage rates up to choke off demand as they can’t cope with the current level of applications!

My best mate found this out a couple of days ago… Having approached the Halifax, whose rates had gone well over 2% for the 70% LTV that he wanted, previously having been closer to 1.5%…

I fixed at 1.44 for 5 years with my current lender for starting January next year

I’m guessing you have more equity than I do… Depending on valuation, we’ll be somewhere around 85% in 3 months time, the best 5yr fixed rates for 85% LTV have been around 2.3% typically for a while now. TSB dropping to 1.39% is potentially big news depending on your circumstances! I’m fortunate that I probably have enough saved to drop us to 80% LTV by then too, which opens the market up and drops the interest rates somewhat though.

Ours is 90% LTV and the best they could find us was 2.99% fixed for five years. To be honest, I have no idea if that is good or not but since we can comfortably afford the monthly payments I was happy.

the last thing any sane government

I’d agree. I don’t think our government are competent /sane/trustworthy/in it for anyone other than them selves.

Which is why I wouldn’t rule it out. I sincerely hope it doesn’t come to fruition but I think anyone that ignores it as a threat and mortgages beyond their means is playing with fire.

Along with putting some money from savings into the mortgage to bring the LTV down from in the 80’s to under 75% hopefully, in order to reduce the interest rate further. I will then attempt to cut the remaining term from 28yrs to around 15 (due to combined cuts in interest rates from going from 90% to 75% LTV, better credit ratings, drop in base rates etc, this would only cost approx 10% more per month, which we can easily afford!) in order to build some serious equity in the next 5 years.

We did exactly this, we’re about 3 years into a 10 year fix, we got a great deal at about 4.2%. TR is right, lock in and don’t look back.

we got a great deal at about 4.2%

4.2% is a terrible deal.
Base rates are 0.25%, and then banks usually add on 1.5% to cover their costs.
Assuming you have a reasonable amount of equity you shouldn’t be going above 2%.

Yes you have 10 years of cost certainty, but you’re probably paying twice as much interest for the that. Plus the compound effects.

We have 15 mortgage payments left, basically because we’ve vastly overpaid for the last 6 years, mainly due to low interest rates, 5.99% is the highest I can remember, when we bought our first flat.

4.2% is a terrible deal.

Benifits of hindsight huh. Bet you wish you had the mystic 8ball SK.

Not a fan of 10year fixes as they are rarely stacked close to your favour

and the best they could find us was 2.99% fixed for five years

Shocked by that and the 4.2%.   5 minutes of googling reveals Nationwide at 1.79%.    You need to have a word with your brokers or do a search yourselves. Sounds to me they’re giving the deals that maybe pays them the best at your expense.

We did exactly this, we’re about 3 years into a 10 year fix, we got a great deal at about 4.2%. TR is right, lock in and don’t look back.

We also fixed for 10years about 3 & 1/2 years ago. Our hands were forced at the time and had to settle for 2.39%, so 4.2 does seem high. But who knows perhaps in a year or so 4.2 fixed might look very good indeed. but like you, my risk adverse nature means I’m happy to be able to budget long term for my biggest financial burden.

As for the OP I’m expecting negative rates soon, (pre Christmas) followed by a massive rise at sometime in the future (12 months – 2 years). Like everyone else’s predictions on here it’s defiantly a finger in the air kind of guess and with time I firmly expect to be proven to be talking out my arse.

Shocked by that and the 4.2%.   5 minutes of googling reveals Nationwide at 1.79%.    You need to have a word with your brokers or do a search yourselves. Sounds to me they’re giving the deals that maybe pays them the best at your expense.

It was about 2 months ago now so I have no idea if that deal was available back then. We wouldnt know where to start without a broker to be fair. I imagine the low deposit we had didnt help.

Shocked by that and the 4.2%. 5 minutes of googling reveals Nationwide at 1.79%.

That’s a headline rate though and requires a large deposit, most people will be lucky to get offered that rate I think.

They’re staying low for a good while yet. I’d stick my neck out and say base rate won’t top 1% in the next decade.

Really?

We’re two years into a five year fix, so we have to consider what things will be like in 2022-ish. Do we batten down the hatches and overpay as much as possible, batten down the hatches and save ourselves a buffer in case we can’t get a comparable fixed rate next time? or just ride the rollercoaster and see how things turn out? I’m genuinely unsure, but erring towards overpayment.

We did exactly this, we’re about 3 years into a 10 year fix, we got a great deal at about 4.2%. TR is right, lock in and don’t look back.

Christ! 4.2% wasn’t even competitive 3 years ago if you had bugger all deposit! It’s the same rate as I have now, and I only fixed for two years, knowing I was a first time buyer, self employed (at the time), not the greatest credit rating, and we struggled for a 10% deposit too… We knew what we were letting ourselves in for, we’re paying £200 per month more in interest than we would be had we been eligible for a better rate at the time, but we were spending £1k in rent between us and now we’re spending £900 on a mortgage that although not the best, is earning us some equity.

The 2 year plan was always to get both of us to 999 Experian credit ratings (on track), increase our income (done that by factor of 70%!) and then to remortgage.

Ours is 90% LTV and the best they could find us was 2.99% fixed for five years.

That would have been pretty good for 90% LTV when you fixed, you could probably get around 2.7-2.8% now (base rate has gone from 0.25% to 0.1% since you fixed), so don’t worry too much despite what others are saying. HOWEVER… Getting from a 90% LTV to even just 85%, or on to 80%, makes a MASSIVE difference! Typically interest rates drop by 0.5% or more going from 90% to 85%, and even down another 0.5% again when dropping to 80%… Beyond that, it’s very small incremental improvements in the interest rates, most of the money the banks make in property is during your first few years of ownership, when you don’t “own” very much of it, and you’re paying them lots of interest. Once you’ve sunk 20% or more of the value into it, the banks realise you’re far less likely to get cold feet and walk away, so are in it for the long haul, and reduce their interest rates accordingly.

Shocked by that and the 4.2%. 5 minutes of googling reveals Nationwide at 1.79%

2mins of googling 3 days ago revealed TSB were offering headline rates of 1.39% at up to 85% LTV! Will you get that rate…? Who knows… But that’s why I’ve spent the last 2 years doing EVERYTHING to make sure both mine and my GF’s Experian Credit ratings will be 999 by the time we need to remortgage!

We’re two years into a five year fix, so we have to consider what things will be like in 2022-ish. Do we batten down the hatches and overpay as much as possible, batten down the hatches and save ourselves a buffer in case we can’t get a comparable fixed rate next time? or just ride the rollercoaster and see how things turn out? I’m genuinely unsure, but erring towards overpayment.

Unless you can exceed your mortgage interest rates with your savings interest (highly unlikely for Joe Bloggs in the street, you would need some decent insider knowledge to realistically achieve this right now), then put the money into overpaying your mortgage AS LONG AS you don’t get penalised for overpayments. Anything you overpay now, will reduce the interest you owe immediately, as well as reducing the capital you owe (obviously). But more than that, if you can’t get a decent rate when you come to remortgage (less likely, as you’ll have paid off more of it), then you can just increase the length of the terms again (probably wise to only fix for 2 years if you need to do this) to reduce your monthly payments for the time being.

Christ! 4.2% wasn’t even competitive 3 years ago if

Bank of England historical data on 10 year fixes at 75%ltv …..says other wise . Well into the 4s which sorta says where the experts saw us being in 10 years before chaos hit.

Easy to point fingers and offer better opinion with hindsight as I said no point in over analysing after the event with the green eyed monster looking over your shoulder when you knew what you signed up for. Knowing SK he will have been aware of what’s availible and made an informed decision based on what was Infront of him at the time.

5 minutes of googling reveals Nationwide at 1.79%.

3.49% at 90%LTV on the actual Nationwide site. Most providers were dumping 90% rates a few months back, so seems likely that there were limited and more expensive mortgages around. 2.99 for 5 years isn’t bad IMO all things considered.

5 minutes of googling reveals Nationwide at 1.79%.

3.49% at 90%LTV on the actual Nationwide site. Most providers were dumping 90% rates a few months back, so seems likely that there were limited and more expensive mortgages around. 2.99 for 5 years isn’t bad IMO all things considered.

Yeah there’s a huge different between 85% LTV and below – which is basically, zero risk for the bank, bar some arseache and 90%+ which represents significant risk.

For the record we bought our first house in Dec. I messed around with a broker for a few weeks, I wish I hadn’t. I used to be an Asset Finance broker, it’s a similar game really so I had some insight, but knowing a little knowledge is a dangerous thing, I gave it to the broker. He just kept coming back with tales of woe, despite perfect credit ratings, and I do mean 999 out of 999 perfect he was getting knocked back, or they wanted 5%+ and to do it over 32 years to pass affordability. I lost faith as this guy was burning through potential lenders, one after the other.

So I decided to go it alone, used the same sorts of comparison sites you can buy insurance with and if it taught me one thing it’s there’s no real alchemy to be done. If you’ve got good credit and you can afford it, then they’re all much of a muchness, that lender who will save you .25% will want a fee roughly to the value of what that rate will save you over the fixed term, that lender who will give you ‘free surveys and legals’ will cost you roughly the cost of a solicitor and survey over the term etc.

The broker said that he had some insight into what lenders liked and disliked… I don’t know how much of that is true, I mean obviously if he’s placing mortgages every day then he’s going to get an idea, but I’m not sure if it would be a good one, also underwriting is a moving feast, it’s a hugely complex algorithmic decision engine that’s updated constantly with new data. Apart from a few basics (no CCJs in the last 5 years, no missed payments in 3 years etc) he’s not going to be told much.

Ultimately I went with Lloyd’s, they were a tiny bit more expensive than the cheapest potential option, but as they’re our bank it was very easy. I calculated using them would cost me just less than £20 a month more than the cheapest in the over-all picture, but as they had given me an agreement in principle online in 5 mins (which I needed to buy the house) and they agreed the whole thing subject to survey in branch in 20 mins, it was worth the stress saving alone.

We got 3.5% (I know, I can hear the screams coming from the back of the room now) with 95% LTV and 2 years fixed, but importantly it was no fees and ‘free’ legals, because our old Landlord had given us our marching orders unexpectedly and we were moving 5 months ahead of schedule.

By all accounts, we bought well and it was one of those rare occasions it was possible to add more value to it, than it would cost to actually do without having to do too much labour ourselves. All things being equal, we should have been able to remortgage with 85% LTV at the end of the 2-year fixed rate period, maybe we will now, maybe we won’t. Zoopla suggest we’re there already, which despite it seeming madness to me, it’s unlikely the Bank will disagree with that value.

Ultimately I went with Lloyd’s, they were a tiny bit more expensive than the cheapest potential option, but as they’re our bank it was very easy. I calculated using them would cost me just less than £20 a month more than the cheapest in the over-all picture, but as they had given me an agreement in principle online in 5 mins (which I needed to buy the house) and they agreed the whole thing subject to survey in branch in 20 mins, it was worth the stress saving alone.

This is important. Mate of mine found a good deal with HSBC around the same time I had to renew circa 5 years ago….. He danced the HSBC dance with countrywide and their useless conveyance and they came back and what became was they knocked down his valuation and bumped him an LTV bracket….. After 3 months of “proceedure” he ended up staying with his current lender.

All while paying svr in-between…. Conversely my remortgage was a quick. Phone call -as doing it online wasn’t an option back then . And a couple of paper forms.

Currently been a really low tracker for several years with NW – and will carry on – 1.19 – no point paying it off when it’s this low.

Funny how the rate is now up on the new identical product though.

We have this discussion every once in a while – sure no one can predicit anything but my status is to remain on a tracker – interest rates are going nowhere in the short/medium term – the economic conditions don’t exists for them to increase.

The housing market is probably the only thing that the government can actually pretend is a good thing (And that’s a double-edged sword – especially if you are currently trying to get on the ladder.)

So despite the BoE being ‘independent’ (don’t make me spit my tea) will not act against the interests of the government by setting off high interest rates on an upward scale in the short-medium term.

That said – always allow for the unpredictable and things to change quickly when they do.

Currently been a really low tracker for several years with NW – and will carry on – 1.19 – no point paying it off when it’s this low.

im genuinely interested to know where you have the balance invested that’s paying more than 1.19%?

As a slight aside, is NOT paying off your mortgage in full and having a tiny one still a thing?  I seem to remember people doing this to maintain an extendable secured loan at low rates “just in case”…

I listened to this on Radio 4 the other night, thought it was a fairly apt piece for this thread.

im genuinely interested to know where you have the balance invested that’s paying more than 1.19%?

Property and stocks and shares are comfortably beating that at the moment. Also pension fund may make sense with the tax benefits. Also having some “rainy day” money that you can easily access is pretty sensible right now.

With investment you can always get the money out and pay the mortgage off at some later date.

Yes, it’s not as simple as sticking it in the bank and beating the mortgage rate, but it can work. Paying off the mortgage early isn’t automatically the best option.

stocks and shares are comfortably beating that at the moment.

I thought that may be the answer.  We have a fund building but it’s in NS&I, so with that falling off the charts next month I’d considered moving it to a moderate level Vanguard Lifestyle fund, but am nervous it’ll drop in value.

I’d considered moving it to a moderate level Vanguard Lifestyle fund, but am nervous it’ll drop in value.

Totally get that. I put off moving my savings from a nice safe ISA doing nothing into stocks and shares. Finally bit the bullet, got pretty lucky early on, since then it’s steadily grown at a good rate.

Yes it can go down, but in the long term it’s a pretty safe gamble, especially with something like a tracker.