Mortgages

Apparently we're moving house – saw one we wanted 5 weeks ago, ours went on the market 3 weeks ago and someone made an offer today so rather whirlwind!

The house we're after is up for £160k. Obviously, we'll be offering a bit less and, by the time we've paid off what's still owed on out current house, etc. we're expecting to need a £70k mortgage.

What kind should we be looking at? Is it worth getting a fixed rate now, as the interest rate's hardly going to get lower, or is it going to be this low for so long it's better to stick with a variable rate? Who's doing good deals at the moment?

we are exchanging contracts on friday, when we went to see th building society she said there wasn't much choice tbh, we fixed it for 2 years, as tey weren't offering variable rate.

Is it worth getting a fixed rate now,
yes, if you can find a good one. Rates are only going to go one way…
Bagged a great one with Abbey a few months ago but might not be available now.
Highly recommend these guys:
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Rates are only going to go one way…

That was my thinking, but you end up with a higher rate when fixing, so if they're going to stay low for a long time…

true dat. I've heard from 'those in the know' that rates possibly expected to rise a tad before the end of the year, but pinch of salt and all that.

rates have already started going up again unfortunately. I completed on a house 3 weeks ago, with the mortgage agreed about 1.5 months before that with a rate of 5.3% on a fixed deal, same lender is now only offering 6% with the same deposit. I've fixed for a fairly long time as in my mind when the economy picks up they're going to have to raise the base rate quite high to combat inflation.

How come that when rates were higher I had fixed rates of 4.8 and currently 5.3 yet it seems despite rates being 4 or 5% lower than then I wont be able to get a similar one now? rubbish!!

Get in touch with MrTall off of here (he's an IFA). Got me sorted and he will give you an honest assessment of what is available.

The trouble is that the base rate can only really go up, so the banks have very little to gain by offering fixed rates, as they can only loose if the base rate changes. This is reflected in there quite frankly exortionate fixed rates. In 2004 when I bought my house, I got a rate of 4.75 and the base rate was 3.75%! shows how much there raping us now to fill there black hole of defecit.

I dropped onto the variable rate last year, and Ill be staying there! It works out about £2500 cheaper a year than the fixed rates, so i've been putting the savings in a slush fund should the gamble not pay off. If it does, Ill be significanlty richer, and as Ive already had 12 months on a better rate, it would have to rise considerably to have been less cost effective than a 2 year fixed.

When the rates go up, you also have to wonder weather the fixed rates will nessesary go up at the same rate which is the hart of peoples fears about not fixing now. I think that yes there will be an increase, but not directly linked because of other market factors.

We're just waiting on the valuation to come through for our mortgage… so fingers crossed/biting nails time here…

Anyway, we plumped for a 2 yr fixed rate with Nat West as it looked like a good rate, plus the setup fees were discounted, which meant we could afford it. Then there are no exit fees after the 2 year period is up… and we can overpay etc etc…

I did have a look around at discounted rates but there doesn't seem to be a huge disparity between the discounted and fixed rates available at the moment.. maybe about 0.6% or so, but you are taking the gamble that rates don't go up at all in the next 2 years.

My maths puts it at about £1000 cheaper over 2 years for the tracker with the current rates once you take into account the difference in fees, but if rates do start going up, which they must, it won't be long before the tracker is more expensive. So the gamble is, whether you think rates are going up, and then by how much…

For me, at least for the time being I'd prefer to know I had fixed costs that I can budget for, and then look into what's available two years down the line when hopefully we'll have paid off a little of the extra capital as well.

I think fixing might be best for us too. My youngest starts school in 12 months and my wife is going to be looking for a 'proper' job then, so fixing for a couple of years and then looking again probably makes a lot of sense.

The mortgage is only going to be for 50% of the current value of the house, so hopefully we'll get a nice deal.

This is what we're hoping to buy, by the way:

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😀

You clearly get a lot (of garden) for your money in Darlo!!!

Don't go to the banks without consulting an IFA (I'm one if you need some help).

You would be better going for a 5 year fixed at the moment. Yes, fariable will be cheeper, but once rates start to go up you will end up paying double the fees to fix, and there may be exit penalties to come off the variable rate.

Best 5 year deal is 6.49% with a £499 fee, which you can add (these are on a 75% loan to value so if you have more equity you cpould get a better deal). If you are happy to Monmouthshire Building Society are doing a 10 year fixed for 6.09%!

Escentially, if you fix for 2 years, just as you come off the rates WILL be a lot higher than they are now, so you could be coming off at the worst time possible.

Most IFA's will search the market for you without a fee, but if you then proceed may charge a fee, but the good ones will offset the proc fee they receive from the lender, so you will pay less anyway.

If you want a chat PM me I'll let you have my mobile.

Chris.

That's not a garden, it's a smallholding! Where's that?

HSBC 5yr fixed is 5.39%, with a £599 fee. If you can do 60%LTV (which you can edit!), it's 4.95% with a £999 fee.

Thanks mcobie. We're seeing the mortgage guy in our estate agent tomorrow, and are going to see the bank who we have our current mortgage with.

That's not a garden, it's a smallholding! Where's that?

It's in the Haughton area of Darlington, in the North East.

You've got plenty of room for some jumps there!

Mike, by all means take the best mortgage offered, but both will try to sell you life and critical illness cover or other protection products. I promise you, both will be more expensive than a true IFA will be able to source, and possibly not suitable for your needs.

The estate agent guy will have a limited number of products he can advise on, and the bank will have their own products only. An IFA can advise you on the whole of market, and has to provide you with the product that best suits your needs.

This is not a plug for me (although i would be happy to help), search on http://www.unbiased.co.uk for a local IFA to you.

mcobie – Not always true about the estate agents advisor only having access to a limited number of products for either mortgages or insurances.

We're a direcly authorised mortgage brokerage offering whole of market advice for both mortgages and insurances and regularly get referals from estate agents.

Oh and i would be careful about quoting rates to someone in a post without filling in a full fact find, issuing an IDD etc etc first especially if you are saying that they are the 'best'. It could be taken that you are giving the op advice without going through the proper processes, you never know who's watching 😉

You won't need to be riding round Hamsterley anymore Mike, not with that on your (back) doorstep!

Mortgages are a funny business right now and I don't envy you with this. Some of the fees are huge and I would always recommend you trying to pay it off upfront rather than adding it to the mortgage otherwise you end up with no real benefit from taking the fix, your balance will be pretty much what you borrowed after the fix is up.

Good luck.

I thought banks were being careful but i spoke to my cousin yesterday who gaily informed me that they got a mortgage on a property they are buying here – 465k loaned, a 10k deposit – jesus wept. Thats incredible(y stupid in my opinion). WTF are the bank thinking !