Jamesy Posted March 11, 2010 Share Posted March 11, 2010 Right my current mortgage is well out of date. Paying over 5.5% currently My mortgage advisor has come up with a couple of new deals and just wondered what people think. My early repayment fee is £3,500. Best tracker deal offered with NO fees is 1.98%, 2 yr deal, or 2.89% fixed for 2 years again with £700 fees. Is the base rate likely to shoot up after the election? any advice greatly appriciated! Muchos! Quote Link to comment Share on other sites More sharing options...
tbourner Posted March 11, 2010 Share Posted March 11, 2010 I'm paying 5.99 and can't change, so whatever you do I'm jealous. Quote Link to comment Share on other sites More sharing options...
Chewie Posted March 11, 2010 Share Posted March 11, 2010 0.69% (0.19% above base rate) and very happy. Quote Link to comment Share on other sites More sharing options...
Digsy Posted March 11, 2010 Share Posted March 11, 2010 Best tracker deal offered with NO fees is 1.98%, 2 yr deal, or 2.89% fixed for 2 years again with £700 fees. What's your LTV? Quote Link to comment Share on other sites More sharing options...
Jamesy Posted March 11, 2010 Author Share Posted March 11, 2010 0.69% (0.19% above base rate) and very happy. blimey - where from? was that a recent deal? What's your LTV? whats an LTV mate? Quote Link to comment Share on other sites More sharing options...
supspower Posted March 11, 2010 Share Posted March 11, 2010 Loan To Value....so Mortgage to property value ratio Quote Link to comment Share on other sites More sharing options...
Digsy Posted March 11, 2010 Share Posted March 11, 2010 As mentioned above, LTV is what you want to borrow divided by what your house is worth x 100, so if you wanted to borrow £100000 against a house valued at £120000 your TLV would be 100000 / 120000 x 100 = 83.3% The higher your LTV the higher the risk you represent to the lender. If you have an LTV of 80% or lower you should be able to get a deal better than which you put in your initial post. Quote Link to comment Share on other sites More sharing options...
edinlexusV8 Posted March 11, 2010 Share Posted March 11, 2010 This is something I mentioned in the other thread related to mortgages: --------- Jamesy, 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. Quote Link to comment Share on other sites More sharing options...
Jamesy Posted March 11, 2010 Author Share Posted March 11, 2010 As mentioned above, LTV is what you want to borrow divided by what your house is worth x 100, so if you wanted to borrow £100000 against a house valued at £120000 your TLV would be 100000 / 120000 x 100 = 83.3% The higher your LTV the higher the risk you represent to the lender. If you have an LTV of 80% or lower you should be able to get a deal better than which you put in your initial post. oh i see - right i think our LTV is around 29% mate Quote Link to comment Share on other sites More sharing options...
Jamesy Posted March 11, 2010 Author Share Posted March 11, 2010 This is something I mentioned in the other thread related to mortgages: --------- Jamesy, 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. yeah see thats what i worried about, paying £3500 fees to get out the current deal, go onto 1.98 tracker only for it to shoot up to 3% or more in a year!! Quote Link to comment Share on other sites More sharing options...
Digsy Posted March 11, 2010 Share Posted March 11, 2010 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. It won't get there in one jump, though. The "recovery" is too fragile to kill with a massive base rate hike now that everyone has got used to cheap mortgages. Individual lenders have started pumping up their own base rates (mine went up by 1.5% overnight) but I don't think the BOE base rate will change by any more than 1 - 1.5% in less then 12 months judging by what it has done in the past (see the attached graph). So if you get a tracker as well as budgeting for now you need to be looking at what you might be paying by the end of your tie-in period if the base rate goes up by this amount. Quote Link to comment Share on other sites More sharing options...
Digsy Posted March 11, 2010 Share Posted March 11, 2010 oh i see - right i think our LTV is around 29% mate 29%? People should be falling over themselves to lend to you then. Quote Link to comment Share on other sites More sharing options...
Jamesy Posted March 11, 2010 Author Share Posted March 11, 2010 maybe the 2.89% fixed is a better deal? can you still pay off a bit extra per month if you go interest only to actually pay some of the mortgage off - or would you be better going full repayment? Quote Link to comment Share on other sites More sharing options...
Digsy Posted March 11, 2010 Share Posted March 11, 2010 Yes, you can usually pay off a certain amount of your loan even if you take out an interest only mortgage. The lender will specify how much you can pay off per year in the Key Facts document that explains the mortgage. This is in fact what I am looking at doing. The advantage as I see it is that I will be only bound to paying the interest every month if the rate goes up. Let's say that I can afford to spend £500 per month on a mortgage in total. If I take out a tracker repayment up to that amount ans the rate goes up then I am forced to pay £500 plus whatever the rate hike is. On the other hand, if I take out an interest only at the same rate I'll only be forced to pay, say £200 in interest. I can choose to pay the additional £300 off the capital for as long as I can afford it as long as 12 installments of £300 don't take me over the repayment limit. If the rate goes up and my interest goes up to, say, £300 then I can simply reduce my voluntary payment so that I'm still only paying out £500 per in total. When I started looking into this I was surprised that most lenders actually have repayment and interest only versions of the same product. To be honest, mortgages are very personal things which you have to tailor to your exact circumstances at the time and your likely circumstances in the near future. The best you can hope for by asking on a forum is to get a range of opinions. Once you start looking into the small print beyond the actual rate you will probably find that what is a good deal for one person isn't for another. Quote Link to comment Share on other sites More sharing options...
Jamesy Posted March 11, 2010 Author Share Posted March 11, 2010 The advantage as I see it is that I will be only bound to paying the interest every month if the rate goes up. Let's say that I can afford to spend £500 per month on a mortgage in total. If I take out a tracker repayment up to that amount ans the rate goes up then I am forced to pay £500 plus whatever the rate hike is. On the other hand, if I take out an interest only at the same rate I'll only be forced to pay, say £200 in interest. I can choose to pay the additional £300 off the capital for as long as I can afford it as long as 12 installments of £300 don't take me over the repayment limit. If the rate goes up and my interest goes up to, say, £300 then I can simply reduce my voluntary payment so that I'm still only paying out £500 per in total. . thats exactly the same as i was thinking. altho the fixed might be better - altho its £87 more per month now, i can always pay the extra off as long as i can afford to, or if its a quiet month, just pay the interest cheers Quote Link to comment Share on other sites More sharing options...
edinlexusV8 Posted March 11, 2010 Share Posted March 11, 2010 I think 2.89% fixed is the best deal for you for the next 2 years. Coming to Interest only rates as long as you only owe 70% or less of the property value you can get a very good interest only deal. But getting a fixed interest only deal is a not simple either. In my opinion, fixed interest only is the best option for anybody in the current climate. I cannot take interest only coz my LTV is 80% so I have no choice but to go for the tracker of 2.89% which is the lowest I could manage. But after 2 years I am sure my LTV will go down below 70% when I will convert to interest only. Btw, even though when you take an interest only mortgage, you can still make any extra payments to the bank to reduce the principal but that payments should be less than 10% of the total principal before you incur any charges. Quote Link to comment Share on other sites More sharing options...
Jamesy Posted March 21, 2010 Author Share Posted March 21, 2010 I have decided to go for a lifetime tracker. The rate is 2.79% (2.2 above BoE) for the life of the mortgage. No lender fee (it was £2389 for the 2 yr tracker) , no valuation fees and just £370 legals. It has a 3 year tie in after that u can move if you want/need. I am pretty nervous about trackers but this lifetime one means no silly fees every 2-3 yrs and also after 3 yrs if the rate is creeping up you can leave that current deal. Big risk but hey!! Quote Link to comment Share on other sites More sharing options...
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