Matt H Posted February 24, 2010 Author Share Posted February 24, 2010 Does your credit rating not also effect what sort of rate you can get with your mortgage? I presume it would in relation to getting accepted, rather than the product. But I have an A+ credit rating anyway. 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%. Cheers, but my mortgage is a fixed rate for 2 years, so if it goes up there will be no change for me Quote Link to comment Share on other sites More sharing options...
supra_aero Posted February 24, 2010 Share Posted February 24, 2010 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. You are right. But I can't see interest rates being that high until its another boom again. Employment is high, pay rises are high, cost of living is low etc. etc. and people are just spending and not caring about saving (I miss those days!!). We are a long way off that still (unfortunately). Quote Link to comment Share on other sites More sharing options...
Snooze Posted February 24, 2010 Share Posted February 24, 2010 Interest rates were in double figures for nearly the entire time from the early 80's until 1992. Don't imagine there isn't a precedent for it. Of course, house prices were a lot more sensible back then, so people weren't going bankrupt all over the place. Of course, inflation back then was caused by business boom. Whereas today it's going to be caused by insane government spending. Same result tho', I think - unless they plan to let inflation go unchecked..... Quote Link to comment Share on other sites More sharing options...
supra_aero Posted February 24, 2010 Share Posted February 24, 2010 Interest rates were in double figures for nearly the entire time from the early 80's until 1992. Don't imagine there isn't a precedent for it. Of course, house prices were a lot more sensible back then, so people weren't going bankrupt all over the place. Of course, inflation back then was caused by business boom. Whereas today it's going to be caused by insane government spending. Same result tho', I think - unless they plan to let inflation go unchecked..... I was learning my times tables when this was happening You probably know more than I do on this subject. I wish I lived during the 80s boom. I see all those 80s films on wall street and stuff and it looked very appealing indeed . Quote Link to comment Share on other sites More sharing options...
Matt H Posted February 24, 2010 Author Share Posted February 24, 2010 Seems like a lot of people have landed lucky with their deals. Still, It's a better rate that I'm getting now, than when I bought my first house. Quote Link to comment Share on other sites More sharing options...
Project Blitz Posted February 24, 2010 Share Posted February 24, 2010 Matt I am also buying a house, as well as my supra build! difficult times! haha I got a 10% from Nationwide, will find out the rate its pretty high though man i wish i listened to my parents and bought one like 5 years ago & chuck it on rent all these years, could have just moved in now, oh well! Quote Link to comment Share on other sites More sharing options...
Matt H Posted February 24, 2010 Author Share Posted February 24, 2010 Matt I am also buying a house, as well as my supra build! difficult times! haha I got a 10% from Nationwide, will find out the rate its pretty high though man i wish i listened to my parents and bought one like 5 years ago & chuck it on rent all these years, could have just moved in now, oh well! Indeed When you say 10%, do you mean 10% apr or is that your deposit? Just that 10% apr is very high. Quote Link to comment Share on other sites More sharing options...
tooquicktostop Posted February 24, 2010 Share Posted February 24, 2010 How else is my employer supposed to raise enough cash to pay me the annual bonus Quote Link to comment Share on other sites More sharing options...
Project Blitz Posted February 24, 2010 Share Posted February 24, 2010 10% deposit, theres the fella to blame! lol Quote Link to comment Share on other sites More sharing options...
Matt H Posted February 24, 2010 Author Share Posted February 24, 2010 10% deposit, theres the fella to blame! lol That's good then, I thought you meant 10% Apr!! So what Apr have you managed to get then mate? Are you classed as a first time buyer? I also understand that the type of property makes a big difference i.e. apartment or house. Quote Link to comment Share on other sites More sharing options...
Dash Rendar Posted February 24, 2010 Share Posted February 24, 2010 This is obvious, but for those of you on tracker mortgages and currently enjoying obscenely low interest rates, now is the time to overpay monthly by as much as you can, as you'll be saving yourself a fortune in the long run. Quote Link to comment Share on other sites More sharing options...
Whitesupraboy2 Posted February 24, 2010 Share Posted February 24, 2010 20% deposit is where you can get a 2 yr tracker at 2.69% or 2.89% cant remember off top of my head and then its 2% rate. Can pay up to 10 or 20% early per year with no fees. So cant complain this is what ill be going for. I never have to want to save this amount of money again!! Quote Link to comment Share on other sites More sharing options...
imi Posted February 24, 2010 Share Posted February 24, 2010 i'm currently paying ~1% on a lifetime, base-rate tracker. Hth! edit... Quote Link to comment Share on other sites More sharing options...
Matt H Posted February 25, 2010 Author Share Posted February 25, 2010 This is obvious, but for those of you on tracker mortgages and currently enjoying obscenely low interest rates, now is the time to overpay monthly by as much as you can, as you'll be saving yourself a fortune in the long run. Very true. Quote Link to comment Share on other sites More sharing options...
ozz Posted February 25, 2010 Share Posted February 25, 2010 This is obvious, but for those of you on tracker mortgages and currently enjoying obscenely low interest rates, now is the time to overpay monthly by as much as you can, as you'll be saving yourself a fortune in the long run. True but not the best approach. With a tracker mortgage you could be seeing around 1.25% whereas the money in an ISA would earn over 3% so you are actually better off either targetting high debt or saving in an ISA then paying off mortgage if the rates increase. Quote Link to comment Share on other sites More sharing options...
supra_aero Posted February 25, 2010 Share Posted February 25, 2010 This is obvious, but for those of you on tracker mortgages and currently enjoying obscenely low interest rates, now is the time to overpay monthly by as much as you can, as you'll be saving yourself a fortune in the long run. I also don't agree with this. I am only young once and am thoroughly going to enjoy having my own place at an incredibly low mortgage rate and live the city life style. When I am old with a grey afro blowing in the wind of my aerotop classic, I'd happily stay in with my pipe and slippers to pay a higher rate mortgage. Until then,... [cue music...] $£$£$£$£$£ money money money...in a rich man's world Quote Link to comment Share on other sites More sharing options...
Jurgen-Jm-Imports Posted February 25, 2010 Share Posted February 25, 2010 me and linzi got our first mortgage 3 years ago.. interest only paying around 780 a month at 5.5%.. or we could of chose capital and interest around 1k a month.. so after 3 years we paid nothing off the house on interest only but the 280 month we saved ... means we raised over 10k..over 3 years so right now on interest only we can now pay off 10k off the next mortgage deal we choose.. but if we went with the capital and interest, we would still owe full balance and maybe paid off 1k.. but since the base is so low, we have not agreed a deal with anyone and we are now paying only 450 a month in interest so we will continue on this till something changes.. then we remortgage and if we can get 3-6 months at current rates then means we can pay more off house by saving the difference.. of course the above only works if you save the money. Quote Link to comment Share on other sites More sharing options...
supra_aero Posted February 25, 2010 Share Posted February 25, 2010 Never thought of it like that - good thinking Jurgen. Maybe you and Dash Rendar have a point. Quote Link to comment Share on other sites More sharing options...
Snooze Posted February 25, 2010 Share Posted February 25, 2010 It's exactly like Ozz says. If you have spare cash because you're on a low interest rate at the moment don't assume the best option is to overpay straight into your mortgage. Jurgen's situation is tantamount to the same thing - he's deliberately choosing not to pay off any more capital than he has to (in his case by having an interest only mortgage - of course there is a bit of a gamble with house prices if you go interest only, but that's the trade off). If you can earn more interest on that extra money by saving it elsewhere than you would save by paying off extra on your mortgage, then save it elsewhere, and pay off in a bigger lump sum at the time the situation reverses. Due to my silly, low interest rate, I'm actually banking away loads of money at the moment. It's going into long term savings where I'm earning ~5% interest (net 3% after tax, of course). If I was paying it into my mortgage, I'd only be saving the 1% interest that I'm paying on the mortgage. Quote Link to comment Share on other sites More sharing options...
tbourner Posted February 26, 2010 Share Posted February 26, 2010 I wish I had spare money to save, even if it was at 0% interest. Quote Link to comment Share on other sites More sharing options...
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