Mortgage Rates

[Matt H]

I was tempted to put 'rant', but I quess it's not a rant, it's more of a;

 

So the BoE base rate is currently 0.5%, yet the best rates I can get with a 15% deposit is ~ 4.5 to 5.0%.

 

I've settled with the Halifax at 4.8% apr, yet it confuses me how the 'uplift' is respectfully so high.

 

If the base rate is so low, it's the bank that are making all the money, not the customer saving it, which is what I thought the point of the base being so low was for.. to aid us out of recession? Not make it easier for banks to make more money?

[Alex]

My summation of the rates they charge at present:

 

The banks are a$$holes and not here for your/our benefit. There are no laws that can force them to offer better rates...they only compete against each other and since they are all slapping each others backs and doing the secret handshake, instead of competing against each other they are just interested in jointly r@ping their customers until credit is easier to come by and they can compete against each other like good businesses again.

 

[Snooze]

I'm currently paying ~1% on a lifetime, base-rate tracker.

 

HTH!

[supra_aero]

C&G do very competitive rates.

 

If it's because your a first time buyer Matt it'll always be quite high. The way the cookie crumbles I'm afraid. Again the rich get richer. I am paying 7.8% (fixed rate first time buyer rate )!!! Thankfully it drops to 2.5% in 2 months

[Alex]

I'm currently paying ~1% on a lifetime, base-rate tracker.

 

HTH!

 

 

And that's the flip side - people on deals like that - you jammy buggers - are being paid for by those new deals.

[redtwinturbo]

Another problem is that although the base rate is low, the rate which banks lend to each other (which traditionally is close to base rate) currently isn't - it's higher (due to recent economic conditions) which of course is passed onto the customers.

[supra_aero]

Another problem is that although the base rate is low, the rate which banks lend to each other (which traditionally is close to base rate) currently isn't - it's higher (due to recent economic conditions) which of course is passed onto the customers.

 

yup

 

I'm currently paying ~1% on a lifetime, base-rate tracker.

 

HTH!

 

How and when did you get that deal?

[The-Plethora]

Grrr, heres another situation from a first time homeowner...

 

I have a 40 year mortgage! I just got my 3rd year mortgage statement showing how much I had left to pay on the 90K I borrowed after my deposit, I had paid off about £1300!

 

When at the bank I met an old chap waiting to do his banking and we got chatting and he simply refused to believe I had a mortgage of 40 years, he thought I was making it up.

So...things could be worse

[supra_aero]

40 years? Blimey those were the days.

 

Mine was 100% mortgage, another unheard of thing nowadays. Glad I got it when I did as no chance I'd get the place I'd have now at my age.

[Matt H]

I'm currently paying ~1% on a lifetime, base-rate tracker.

 

HTH!

 

Anchor!!! Is that 1% higher than base then mate? so 1.5%? That's a bloody good deal!! Can't see the base getting much higher than 1% in the next year.

 

C&G do very competitive rates.

 

If it's because your a first time buyer Matt it'll always be quite high. The way the cookie crumbles I'm afraid. Again the rich get richer. I am paying 7.8% (fixed rate first time buyer rate )!!! Thankfully it drops to 2.5% in 2 months

 

That's the thing, I bought my first house when I was 19, but since selling it and moving back to Manchester, I've not had a property for about 2.5 years, so I classed back as a first timer

 

I just thought with 15% deposit I could get something really good

[Snooze]

How and when did you get that deal?

Anchor!!! Is that 1% higher than base then mate? so 1.5%? That's a bloody good deal!! Can't see the base getting much higher than 1% in the next year.

 

Nope - it's 0.5% over, so at 1%.

 

The mortgage was originally taken out in 2001, tho' - so I've been sat on it a while. Started out as a stepped discount over the first 4 years (3%, 2%, 1%, 0.5%) then they automatically shifted it onto their lifetime, 0.5%-over-base rate tracker after 4 years.

 

Was paying £800 a month back then - I'm paying £550 a month now!

 

It's with Alliance & Leicester, who are part of Santander, so they can afford it!

 

I was actually looking into shifting it just a year or so before rates started dropping through the floor, so thankfully my apathy actually worked to my advantage this time!

 

The only problem is that with the recent arrival of my 2nd child, the house we're in is way too small, and if we're looking to move to a bigger place, I'm not sure how willing they'll be to let me keep the current arrangement (obviously taking out a different arrangement for the extra), or whether they'll force me to re-mortgage the whole lot.......

 

I'm thinking now is the time to take out a term-lenght (20-30 year) fixed mortgage. Is anybody doing these at the moment?

[supra_aero]

Snooze that's quite lucky indeed.

 

That's the thing, I bought my first house when I was 19, but since selling it and moving back to Manchester, I've not had a property for about 2.5 years, so I classed back as a first timer

 

I just thought with 15% deposit I could get something really good

 

I didn't know that they reclassify you. Bit sneaky.

 

I wish I could switch mortgage provider but as I took out 100% mortgage I need to make the difference with a deposit now if I do switch.

 

Just quite lucky my provider is competitive now my deal is finishing.

[Matt H]

Nope - it's 0.5% over, so at 1%.

 

The mortgage was originally taken out in 2001, tho' - so I've been sat on it a while. Started out as a stepped discount over the first 4 years (3%, 2%, 1%, 0.5%) then they automatically shifted it onto their lifetime, 0.5%-over-base rate tracker after 4 years.

 

Was paying £800 a month back then - I'm paying £550 a month now!

 

It's with Alliance & Leicester, who are part of Santander, so they can afford it!

 

I was actually looking into shifting it just a year or so before rates started dropping through the floor, so thankfully my apathy actually worked to my advantage this time!

 

The only problem is that with the recent arrival of my 2nd child, the house we're in is way too small, and if we're looking to move to a bigger place, I'm not sure how willing they'll be to let me keep the current arrangement (obviously taking out a different arrangement for the extra), or whether they'll force me to re-mortgage the whole lot.......

 

I'm thinking now is the time to take out a term-lenght (20-30 year) fixed mortgage. Is anybody doing these at the moment?

 

Ah right, so it was a lucky choice then. Can't argue with luck being on your side!

[Snooze]

Ah right, so it was a lucky choice then. Can't argue with luck being on your side!

 

Oh - very much so. In fact, as mortgage selection is just about guessing what's going to happen to the interest rate, isn't it pretty much luck-based whatever you do?

[supspower]

Does your credit rating not also effect what sort of rate you can get with your mortgage?

[Konrad]

I'm with Alliance&Leicester on tracker mortage 2.49%. I did put 50% deposit on my house tho so it might be why I got interesting offer like this No punishment on overpayments (so basically I can overpay as much as i want), no fee at the start, free structural survey

[tbourner]

Mine's fixed at 5.99% until June next year, when it will no doubt be up at about 15% or something stupid. It was a 100% mortgage as well, so with house prices going all over the place we're now slap bang on 0 equity again. Still; only 31 years left to pay.

[edinlexusV8]

Matt, we are buying a property aswell this month. We are putting in 20% deposit and we got 2.89% tracker from RBS/Natwest.

 

The current bank of england base rate is 0.5% and our tracker rate is 2.39% above the base rate. The BoE base rate totally depends on the rate of inflation. The Chairman of BoE is expecting the inflation to be under 2% for this quarter, but the current inflation seems to hit 3.5% and might possibly comes down low 2%. Anyway the base rate will be going up by atleast 1.5% to 2% pretty soon. this is a pessimistic view of the current market, but along as the fuel prices go up the inflation will be high and so is the base rate.

 

The reason why I am mentioning all of this is becoz you are going in with a mortgage that is 4.3% above the base rate and you should know how much more you need to pay if the base rate goes up by atleast 2%.

[Chewie]

Nope - it's 0.5% over, so at 1%.

 

The mortgage was originally taken out in 2001, tho' - so I've been sat on it a while. Started out as a stepped discount over the first 4 years (3%, 2%, 1%, 0.5%) then they automatically shifted it onto their lifetime, 0.5%-over-base rate tracker after 4 years.

 

 

You're being ripped off. Mine's 0.19% over base. Currently paying 0.69%. I'm with the Woolwich (Barclays). Set back in 2004.

[Snooze]

You're being ripped off. Mine's 0.19% over base. Currently paying 0.69%. I'm with the Woolwich (Barclays). Set back in 2004.

 

lol

[stevie_b]

If it's because your a first time buyer Matt it'll always be quite high.

 

Why does being a 1st time buyer mean that you get penalised? I can understand being penalised for having a high Loan-to-Value ratio (i.e. a low deposit), but many 1st time buyers have substantial deposits to put down.

[Snooze]

The current bank of england base rate is 0.5% and our tracker rate is 2.39% above the base rate. The BoE base rate totally depends on the rate of inflation. The Chairman of BoE is expecting the inflation to be under 2% for this quarter, but the current inflation seems to hit 3.5% and might possibly comes down low 2%. Anyway the base rate will be going up by atleast 1.5% to 2% pretty soon. this is a pessimistic view of the current market, but along as the fuel prices go up the inflation will be high and so is the base rate.

 

Have to agree - the amount of "quantative easing" that was introduced and the collapse of the GBP means that the upshot is going to have to be some serious inflation. All the extra investment they're talking about making now is just delaying the inevitable..... at some point soon, inflation is going to hit HARD.

At that point the BoE is going to have no choice but to blast up the interest rates - I wouldn't be surprised to see it back up into two figures within the next 5-10 years.

[supra_aero]

Why does being a 1st time buyer mean that you get penalised? I can understand being penalised for having a high Loan-to-Value ratio (i.e. a low deposit), but many 1st time buyers have substantial deposits to put down.

 

 

I am also numb struck by this. I can only assume its because you have no track record of mortgage repayments so you are at higher risk. If you put down a very large deposit that counters the risk as they at least have your big downpayment as almost collateral.

 

Does your credit rating not also effect what sort of rate you can get with your mortgage?

 

Which ties into your question - yes.

[supra_aero]

Have to agree - the amount of "quantative easing" that was introduced and the collapse of the GBP means that the upshot is going to have to be some serious inflation. All the extra investment they're talking about making now is just delaying the inevitable..... at some point soon, inflation is going to hit HARD.

At that point the BoE is going to have no choice but to blast up the interest rates - I wouldn't be surprised to see it back up into two figures within the next 5-10 years.

 

I don' t think it will is my personal view. Go up yes, but not to double figures, otherwise a very substantial proportion of the population on interest only mortgages will go bankrupt. And possibly those on repayment mortgages as well.

 

Not to mention buy to let landlords. Rents may go up astronomically to compensate.

 

Also setting such a high interest rate would cause house prices to absolutely plummet. If they were going to do that, I'd have guessed they'd have done that when the recession initially hit to get it over and done with, like they did in the last recession (which is what they SHOULD have done in my opinion and let more banks drop and go bankrupt and not bail them out).

 

And lots of people with huge debts would be bankrupt as well if interest rates went up (credit cards etc. - 0% credit cards would go). Businesses would never be able to get any further loans at a decent rate meaning more will go under.

 

Double figure interest rates doesn't make sense.

 

Obviously I could be wrong

[stevie_b]

Interest rates are AFAIK the best weapon the BoE has for controlling inflation (proponents of a single currency, take note!).

 

I don't know enough about what affects inflation to say how high interest rates could go, but when the global economic recovery picks up speed, increased consumption from huge economies like China as well as our own domestic consumption will surely push inflation up.

 

I remember savings interest rates being 13% in the mid-late 1980s, and I would guess the base rate was a similar figure to this, thus typical mortgage rates being higher still.