For me the math is simple. If a bank, which is in the business of making money, can offer a 10 year 2.89% mortgage, that tells you where they think interest rates are going.

The answer is nowhere, as I have been saying for years. Every other month an interest rate rise is mooted, and then lo and behold something comes along which means is doesn't happen - the financial industry is playing games with the Great British public

Let's be clear - any significant rise in rates means the UK is bust - plain and simple.

If you want to know where the UK interest rates are going the check Japan - virtually 0% for 20 years, and now they have negative interest rates.

Save your money and let your mortgage stay variable.....

Take, for example, a couple in an area with a good school in a house that they see themselves living in for the long term where one partner has just fallen pregnant with the first of a few planned children.

For this hypothetical couple, knowing that they'll be paying 2.89% until the first child is 10 years old may be more desirable than paying 1% less for the next two years but facing a possibility of paying 4%+ during the years after the birth of their 2nd or 3rd child - just when one of them comes off the labour market and their budget gets a whole lot tighter.

On one hand you have the 'security' of knowing your rate will not change over the next 10 years. On the other you are stuck with an early repayment charge for all of that time.

I never get tempted by these long term mortgages personally, with a 60 percent LTV you could get a rate 1-1.5 percent lower than this on a short deal. Saving thousands per year and also the option of no ERC.

Seems a lot to lose just for peace of mind that your rates payable will not change over a longer period. Just my opinion

This shows a lack of understanding of financial markets. The bank actually sell on the debt immediately and their profit is guaranteed regardless of the direction of rates. Their only problems will arise for borrowers who stop paying - a matter that is, for the most part, unrelated to the future direction of rates. Indeed, the risk of default is likely lower on a fixed rate than it is on a rate with no theoretical upper limit.

With the above in mind, your argument changes to that of thinking rates are going nowhere because availability of a 10-year 2.89% rate shows you where investors in debt, not the bank, think rates are going.

The major flaw with this argument is that it assumes that investors don't get it wrong. Another flaw is that investors don't even need to get it wrong. Take, for example, a pension fund that's trying to offer pension payments to a group of people based on a £2 billion fund balance. Such a fund may invest £1 billion in the debt market at 1.5% fixed for 2-years and £1 billion at 2.89% fixed for 10-years. This doesn't necessarily mean that they don't think rates will rise - just that they need a better return on their capital in the near term in order to meet their pension payment obligations.

Yup **** ... Just looked as well ... There 5 year one is still there.

Just spoken to first direct - they've pulled their 10 year fixed mortgage.

Just spoken to first direct - they've pulled their 10 year fixed mortgage.

http://www.hotukdeals.com/deals/10-year-fixed-rate-mortgage-65-ltv-leeds-building-society-2-75-2411054

...this is still available... £1499 setup fee but with a 2.75% rate over 10 years may work out cheaper depending on the size of your mortgage obviously, and especially if you don't add the fee to your motgage

Yep not offering this anymore. Managed to secure my rate. Should be transferred over by end of the month. Glad I rang them before end of March :smiley:

They currently offer a decent 5 year fix at 2.39% but I'm still confident this is the one to go for.

Yeah I looked for it last night and it seems to have gone, best they offer is now 2.99% :disappointed:
Looking around I can't find anything to match it, there are some lower rates but exorbitant total fees compared to this with just £35 valuation and no other fees.

I believe this deal is over. Got my offer yesterday and the advisor I spoke to told me they had mow pulled the deal.

thanks

Link does not work. I think this is the right one.
http://mortgages.firstdirect.com/mortgage-rates/product/10-year-fixed-repayment--fee-saver-ltd-edition~91

Do elaborate sir.

For me, this full thread is the embodiment of why the UK economy is screwed.

The most recommended bank in the world. Top of every customer service poll ever run since its inception. But, then again, maybe you are not deluded. Maybe you are right and everyone else is wrong. They do not have a single 'hidden' charge. If you can't be bothered to read the information provided, that's your fault. I'm assuming you got charged for something that was your fault but you are one of those people who always blame someone else rather than accepting responsibility for your actions. http://www1.firstdirect.com/1/2/rates-and-charges/charges

But does mean somebody else, or rather the market as a whole, has priced a ten year rate below this headline rate, presumably with an informed guess of long term rates are heading, and an expectation of profit.

IMHO it is futile to speculate on future direction. It's more about individual attitude to risk - the value you place on having certainty versus the inevitable premium you pay for your fix.

This is dangerous advice. The banks don't 'think' anything. They hedge out their interest rate risk with financial instruments called swaps, so they don't care where interest rates go in the future. Of course they earn a little spread and then sell on this hedge as a 'fixed rate mortgage' to you. So the fact they are selling this to you doesn't mean they think rates are going to stay low forever.

As a current account & mortgage customer, I can't think of one. Perhaps they are very hidden?

Name a single hidden charge.

they're a bank not a charity so surely you weren't expecting any different?

Fist direct Bank is one of the worst bank you could ever deal with. Their policies are purely based on ripping people off. All they are interested in is making as much money as they can and giving back as little as possible. Their hidden charges are beyond believe. there is nothing positive or good I could say about them.

Same - The app has never seemed able to deal with a large amount of posts for a thread on my phone

Test message please ignore... I'm missing last few pages of the thread in my app... Just seeing if posting helps!

Update - looks like the Android app is broke and does not display the lastest ten or fifteen posts!....can anyone else confirm this please?

Coventry BS have a non BTL for 2.59% at 65% LTV offset for 5 years but 1K fee.
It was the best I could find. If you find a better one I'd be interested as am about to bite.

Yes, very. Only a very small percentage of applicants would actually get this deal

Try and extend the term. I think they will go as far as your 67th birthday. You can then still pay it off in 7 years if you want to. Just leave a small balance for the remaining 3 years,

Must be a popular deal. Don't worry, you'll still get the deal if it's withdrawn as they honour the rates available when you initially called and made the appointment.

If your rental income is going into an fd account, it is likely they will spot it. Especially if your contact address is not the one they hold security over. They won't report you to anyone. If you are renting out short term, they will likely allow it but insist on you moving to capital repayment if your are currently on interest only and will remove the redraw facility. If it's a long term rental, they'll insist that you remortgage to a lender with a business lending licence, and recommend their parent company (HSBC).

Not picky, just a responsible lender.

This is a fantastic rate, but I hope people realise another recession is looming. It's very likely we may even see it sometime this year. Yes you'll save money on the mortgage with a deal like this, but you'll also lose a whole lot more on the depreciation of your house or apartment, when the market contracts. If you're in it for the long run, it might not matter as much.

That's the remaining term of my mortgage

We got really lucky with our property originally bought after saving for 2 years with my wife at a 85% LTV but I knew the house was worth alot more, just remortgaged and the mortgage company re-valued it and it had increased in value by just over £100,000 and so now have a 65% LTV mortgage with Yorkshire building society.

Maybe ... on the other hand I remember my first mortgage was 12% and at times went up to 15.5% and remember a bit later think a 8% f5-year fix was amazing!

i think barclays do 10 year fix for 2.99% with 80% LTV...i think the fees are between £1k to £1.5k though

Does anyone know if first direct are picky lenders like HSBC?

Last Feb.

Ring First Direct and ask. I believe they offer existing mortgage customers, depending on LTV, a grace period of 12-24 months on their residential terms after they let their property out.

Make sure you get landlords insurance.

Also, most insurance companies have a condition that you cannot let a property out without the lenders permission. I've heard of people who have had tenants injured in their property, had landlords insurance but the insurance company refused to pay out as the lender wasn't aware of the fact that the property was let.

Thread very carefully and make sure you do everything above board.

How long ago was that?

Didn't last time I remortgaged with them, they offer self certify mortgages to current customers on a without advice service.

Thanks that's fine - the other option i'm considering is moving onto a buy-to-let mortgage but unfortuantley i'm after an offset type which there aren't any that i can find!

They would expect full financial details as it would be classed as a new mortgage. You are also currently risking being done for fraud too. Letting your home, no matter the reasons, is against the T & C's of a standard mortgage. They could ask for immediate payment, bump you on a Buy to Let mortgage (still would need financials), do both and report you to coppers.

Would advise against trying to change unless you could afford a new mortgage.

I know sorry if i've come across 'defensive' - wasn't the intention....exactly why i'm asking what check etc...

sorry, im not having a go or criticising at all. just querying. I thought the if you went to renegotiate another deal, the bank might pick up on it.

I didn't take it out with the intention of renting it out....its just over time my circumstances changed....

would that not void your mortgage, if you took out mortgage as a standard home owner mortgage and now you're letting the property out?

Can an existing First Direct mortgage holder who's just renewed tell me what they require, if anything, in terms of bills etc and do you go through another credit check?

I've had an offset fixed mortgage with FD for 7 years and now i'm on standard variable which is nearly 4%. I'd like to switch to another fixed deal with FD but unfortuantley due to circumstances i've had to rent my place out!

Its west. West midlands. :-)

Personally I don't know how people have 60% equity. Do they rob a bank or something.

I was on a 0.19% above base around 9 years ago, interesnt rates started rising and a I panicked and fixed at 5.24% for 10 years. as the last 8 years have shown me huge huge mistake!!

Single parent one low income one would not pass as won't meet score required if original mortgage was on a couple not single. These days credit files are updated virtually live and if even miss one mortgage payment it will show as a sore thumb and huge decline in score. Think about those who would miss out on this due to just being self employed but can perfectly afford the mortgage payment. It is catch 22 I suppose on some instance.

+1

We've been enjoying a historically low interest and mortgage rates for over 5 years and I doubt that it will last for another 10 years. However, if you have at least 40% equity of your house which this product requires, some might finish paying their mortgages by 10 years especially those who can manage to overpay each month which will make a huge difference (up to 10% without penalty each year), others will have a very little balance to worry about if interest rate of their mortgages rose to over 5-7% in 5 years time, which personally I believe it won't happen that soon and that much, it's all about calculating the saving if you decided to chose the cheapest fee-free mortgage rate for the short terms (2 or 3 years at the time) verse the risk of facing the rise of mortgage rates when remortgaging, it's not a huge risk when you own a huge part of your property in term of the huge rise of interest which might happen in over 5 years to start effect your finance.
This deal is a great peace of mind for those who are tight with their spare money or those who spend loads of money on mortgage product, valuation, legal fees every 2 or 3 years looking only at the low interest rate without looking at the over cost of their remortgage including any additional fees. By looking at the housing market and the global economy today, with over 40% equity I'd choose the cheapest fee-free (product, valuation, legal) remortgage for 2 or 3 years which is about 1.5% and try to overpay what I can afford each month (up to 10% if restricted with ERC). You can use the mortgage calculator on MSE or other websites to calculate the exact cost for your own mortgage and find out if you're better off pay any mortgage fees but much less interest rate, depends on how big your mortgage loan is, i.e. if your loan is £200,000, it's is cheaper to pay £1000 mortgage fee but at 1% interest rate for 2 years (nearly £5000 in cost for the 2 years) than no fee and 1.5% interest rate (nearly £6000 for the 2 years), while someone with only £50,000 mortgage loan would be better off with the fee-free product at 1.5%.
So do the maths on your own circumstances before choosing and try to use the massive saving, which we're enjoying at the moment from the low interest rates, to overpay your mortgage balance or other expensive loans: credit cards, store cards, overdraft etc. that you pay high interest on.

Bought mine in the south, just near london, yes it's a boring crap place to live, but me and the missus have chipped away at the mortgage, if we sell up and come back up north we'll be able to buy your house then stick a couple of brand new lambos on the drive.

cos we're paid peanuts compared to the south east

That's North ;p

Im midlands lol

theres always the question will they lower tho?

Economics doesn't work that why, ask the people in Weimar etc

Seems a great deal. Heat added thanks

Think I'll go for this today. Been with FD for the last two years, and have now reverted back to their SVR of circa 3.69%

Edit: Just called them to book the rate, can't talk to one of their team until next Tuesday!

Shame all the offset deals are only short term fixed...

just had to google a baby boomer. im not quite 50 odd just yet and wife doesnt work and i have three daughters, but just turned 40 and have been lucky with houses, buying and selling by luck really or just the right time. Although saying that things are different ive only ever drove crap cars, ive always wanted a nice one but the house come first. Same with holidays, everyone was going away and we would get a staircase or something as exciting.
I bought my first house as a doer upper, an end of terrence for 45k and sold 3 years later for 98k. Then bought a 155k 3 bed house and stayed there for about 6 years and moved just before the housing crash of 2007/8, i sold that for 355k (spent alot of time and money doing it up) and i got us into a rented bunglow for a year. Where i put a offer on a 5 bed house for 419K. this is what my wife calls a forever house, we have extended it and literally spent every penny on it for 7 years, only taking family holidays for the last 4 years. still didnt get one last year.
House prices have gone stupid round here again, our house is about 15years old now and the house behind us which is identical has just sold for 630k! and thats the same decor as when it was built so id hope to get more for ours if it was for sale.
one of the neighbours has just sold up and mvoed to a new build 4 bed and took 135k from the house to enjoy and still got a nice holiday.I do worry how my girls are going to do it, i'll probably sell this, downgrade and give them some money to get their first house. The lads at work though dont want to do what i did and spend the next 10 years of their life doing houses up and generally every weekend doing something on a house, they want new builds, new cars and holidays and iphones 6's, they want it all now, god i sound old.

I got lucky in a housing boom. Bought a house for £35k, paid the mortgage off with a redundancy payment and sold it for £117k after 3 years. Bought another for £80k with those funds, rent that out for £595pcm which will help to pay off my current home in around 3 years. I'll be 56 by then but will own 2 houses outright. Difficult to see first time buyers being able to manage that these days.

I never mentioned doubling in value, I said after improvements at your own expense, if you borrowed £30000 you might have to pay back £40000, not £60000 that would be doubling in value.
As I said it might be good for some but not everyone and as long as you are fully aware of the consequences and are happy to be in that situation then good luck to you and anyone else. Each to their own I guess.....

Not exactly doubling the value in a great hurry on a new build John, plus paying back most payment/loan/mortgage etc will result in you paying the interest first, you've missed the point completely & seemingly trolling....

Staying on my nationwide 2% above base rate (pre 2009) mortgage with unlimited overpayments without penalty, overpayment reserve so can borrow back and no penalty for paying off earlier. My LTV is only 25% so been overpaying 500 a month and aiming to pay off within 3 years at age of 40 happy days.

Help to Buy might be good for some but not for everyone. The government owns 20% of your home. If you do lots of home improvements to it such as conservatory, loft conversion, garage, landscape the garden etc. You have improved the value of the property at your cost, the Government will thank you for that. They still own 20% of the new value of your home at zero extra cost to them.
You have paid an inflated new build cost to start with, spent money improving it and the Government are laughing all the way to the bank when it comes to paying the new valuation back. Example you borrowed £30000 off them and have to pay them £40000 back.
I should have added that you should look up information about paying this loan back. You don't start paying it back after 5 years as you have stated, you start paying interest on it!!! To pay the loan off you can either pay it off in full (by remortgaging or other means) or a number of large lump sum payments or when you sell the house. There are also additional fees involved when paying it back.

UK rates will go negative next year. Good deal for those who can't budget & need the peace of mind, but I would be inclined to take a cheaper variable / tracker. Rates will rise eventually & when it comes it'll happen quickly & with little warning (catching many people out). One thing's for sure: you can't rely on Carney's "forward (mis) guidance".

Use the savings you make to over-pay.

'Interest only' at 5.2%

I do not know anybody that has taken a 10 year fix that hasn't at some point regretted it in the future, and I know a fair few that have taken such a product.

I'm so glad I got a mortgage just over 4 years ago with very good conditions. A tracker, at only 1% above base, with no entrance or exit fees, and no ERC costs.

If the ERCs on this are linked to original mortgage loan you are going to pay over the odds regardless in the next 10 years, if you're lucky enough to find a spare £10,000 to pay off a chunk once in a while.

This is sadly the way to do it, but a lot of people have a sense of entitlement that they deserve the latest iPhone, kids must have a flat screen each for their PS4 and wonder why they are marching towards destruction when the next GFC hits and they are no nearer to ownership.

No need for the caps pal. Here's an idea, stop, engage brain and wait for the steam to stop coming out of your ears before posting.

Nonsense? Come on, no need for that, let's be civil.

Glad it works out for you; lets us know how you get on with remortgaging :-)

Fair enough, clearly my knowledge north of the coast isn't that good. There are other exceptions such as Brighton, but it certainly seems more common to see a big variance and low cost properties in the north (couldn't believe what you can get around Newcastle for example for less than a studio flat around here)

There can be eg Winchester average price £476k, Eastleigh £272k. Both on main London commuter line and only 8 miles or so apart (less than 10 minutes by train). All depends on desirability, schools etc.

I don't understand the question ?

Yes I'm on the south coast on the commuter line to London, not as bad as London itself but still above national average by quite a bit.

Not as much variation in price down in the south East (if you ignore London)

I just don't understand why.

The North varies greatly in price within town boundaries (I'm talking within the space of 5 miles, average house prices can vary £2-300k) - but I would hate to be living in London, the house prices there are just stupid (unless wanting to live in an area of high statistics.....).

Thanks! Hopefully I'll remember that in a few months when the time comes!

After reading all the comments on here theres only one thing I can say for certain, nothing is certain

If house prices do crash as well & you have an equity loan - pay the govt share back ASAP & you'll effectively be quids in :wink:

What is a mortgage?

It still looks the same actually - https://www.gov.uk/affordable-home-ownership-schemes/help-to-buy-equity-loans
Equity loans are open to both first-time buyers and home movers on new-build homes in England with a purchase price up to £600,000.

You won’t be able to sub-let your home if you use this scheme. It must also be your only property.
How it works

With an equity loan:

you’ll need to contribute at least 5% of the property price as a deposit
the government will give you a loan for up to 20% of the price
you’ll need a mortgage of up to 75% to cover the rest

You won’t be charged loan fees for the first 5 years of owning your home.

In the sixth year, you’ll be charged a fee of 1.75% of the loan’s value. After this, the fee will increase every year. The increase is worked out by using the Retail Prices Index plus 1%.

It's for anyone and any properties, as long as it's not for a second home. You can't own more than one property while using the scheme.

https://www.gov.uk/affordable-home-ownership-schemes/help-to-buy-equity-loans

I assumed they had removed the restriction on using the loan for a new build but cannot find that info unfortunately

It used to be, but it changed around 2-3 years ago to include new builds (older houses were not included in the scheme). I saved as I was looking for an interim home (to stay in around 5 years) in a nice area, before I moved to the big forever home.

Once I'd worked out all moving fee's, solicitors fee's, estate agents etc - it would be cheaper in the long term to skip a step out & move straight to the forever home (moved 4 times, never again now !).

I'm not sure what the rules are at the minute as they seem to change every 6 months or so, I'll check it out now.

is the help to buy scheme not just for first time buyers? im looking for a house at the moment but not really keen on new builds.

What do you base this nonsense on ? I used HTB 2 years ago to buy a brand new house in a fantastic area of the NW. Couldn't have afforded it without HTB (house was more than twice the price of my previous one), but I knew in 5 years time when I had to start paying it back, I would be in a much different position work wise.

I wanted to move as my son was getting to school age & I wanted him in the best school possible. That & the area I was living in was rapidly declining (my car insurance went from £950 to £250 which gives you an idea!).

It also allows you access to the 75% LTV mortgages, which are a LOT better rate than the 95% mortgages I would have had to look at.

The way around this is ensure your mortgage company perform a proper valuation (mine came back £10k under what we agreed with Redrow) & walk away if they wont agree to it. I eventually got them to knock this off the price as we couldn't get a mortgage without it as they had over inflated the price (when you think about it though, the price of a house is what someone is willing to pay for it - 12 months after buying, the exact same house over the road sold for £30k more than I paid for mine!).

Will be looking at mortgages in the summer as my 2 year deal ends - I'm not sure I fancy being tied in for 10 years though.....

This deal does change things. It makes your 5 yr decision even better. How? Because banks now expect rates to stay low for 10 years. Giving you a good chance of bagging another decent rate in 5 years. And you are now only tied in for 5.

See post #92 (hint - switching/remortgaging still likely to be cheaper)

The larger the mortgage the more important the percentage of interest becomes, arrangement fees are less of a concern when you would save a number of times that amount in interest..

I didn't say there was an alternative. & it may seem 'dim' because it is reality. I wish you good luck. Oh wait - try the lottery. Again, good luck.

On one hand you have the 'security' of knowing your rate will not change over the next 10 years. On the other you are stuck with an early repayment charge for all of that time.

I never get tempted by these long term mortgages personally, with a 60 percent LTV you could get a rate 1-1.5 percent lower than this on a short deal. Saving thousands per year and also the option of no ERC.

Seems a lot to lose just for peace of mind that your rates payable will not change over a longer period. Just my opinion

For me the math is simple. If a bank, which is in the business of making money, can offer a 10 year 2.89% mortgage, that tells you where they think interest rates are going.

The answer is nowhere, as I have been saying for years. Every other month an interest rate rise is mooted, and then lo and behold something comes along which means is doesn't happen - the financial industry is playing games with the Great British public

Let's be clear - any significant rise in rates means the UK is bust - plain and simple.

If you want to know where the UK interest rates are going the check Japan - virtually 0% for 20 years, and now they have negative interest rates.

Save your money and let your mortgage stay variable.....

Yes we are it seems. I was talking about the Htb deposit scheme. However in my opinion this is still utter garbage at 3k. If prices keep on at the current pace, this will be even less effective than p***ing in the wind.

I'm after some mortgage advise as I'm coming up for my first remortgage. I looked at some of the 2 year fixed rate First Direct offerings, there is one at 2.24% with no fee and another at 1.59% with a £1450 fee. I'm assuming by taking the fee option more of the mortgage payment is paying the capital, would that be correct?

MATHS MATHS MATHS :confused: please stop watching 'movies'

[quote=pikeybaby]For me the math is simple. If a bank, which is in the business of making money, can offer a 10 year 2.89% mortgage, that tells you where they think interest rates are going.

10 years is a hellova commitment, as decent as the rate is - let's be honest you won't get a rate like this in 5/6 years time! But still....big commitment when so much can happen and change in one's life in 10 years.

always check out Quidco and TCB for cashback Brokers. not all direct deals work out cheaper, just tend to more advertised.

Great deal but sadly we can't get it. We own 70% of the value of our home but are stuck paying 4% as we can't remortgage. Our jobs changed and now we are self employed. Receiving working and child tax credits. Able to make our mortgage payments but ironically can't remortgage for a lower fixed rate. Must be others in the same situation :-(

Heat added but also found the info people have posted very helpful. Currently looking at purchasing a house within the next year and still working out what's the best way to go about it

​good thinking

Marathonic, you would give an aspirin a headache.

Good deal. But I'd be surprised if there is much of a house left in 10 years. Turkey about to invade Syria with their Saudi chums and will start shooting at the Russians. Some tw*t allowed them in NATO.

Like said before you need to take into account setup fees etc which you avoid with this deal

Mine is 56, but any inheritance will knock years off that. Just looking at new deals 1.05% is crazy compared to 2.89% for me that's a difference of £1,250 per year. If rates go down or stay the same quids in by £12,500 over those 10 years.

in japan that is the case with negative interest rates coupled with elderly demographic growing rapidly.

Personally I don't think it's much of a deal, it just goes to show HUKD mortgage front is very popular and we need more mortgage deals posted...it's been a very interesting and informative thread especially as im due to switch very soon, thanks all for your comments and comparisons.
Better advice here then any broker, great stuff :smile:

After reading all these comments... I feel a lil dumb as I've recently taken out a 5 yr fix at 2.79 :disappointed:

Cheers pal

Plus, you can no longer claim tax relief on mortgages taken to purchase a buy to let property.

​My own property has enough equity and my other BTL is on a normal mortgage (mainly because I used to live there and didn't bother to change it).

​Ah brilliant, thanks for clearing that up. Looks a great deal to me then.

Pity I only have under 7 years to pay off my mortgage. This is a really good deal for the term, as it's unlikely we will have low Bank of England base rates over a 10 year period.
Just to think that people used to think 5.25% + fees, for 5 years was a very good deal a few years ago.

Clearly they don't think rates are going up anytime soon! Check how much you can overpay each year should you become rich!

If you read the post properly it says "Interest Only" not "Only 5.2%"

Very dim view of the reality, what's the alternative?

Keep paying rent and being enslaved for 25-30 years ending up with nothing?

This is ideal for buy-to-let I am in the market for one now.

But we're talking specifically about this deal.

Not all the time. Some deals state that you can only over pay by a certain amount every year.

The early repayment charge is is 2% of what you overpay or 2% of the entire mortgage?

So what's the alternative route that you're choosing to take?

Then you are self-employed,

It's funny because pre 2007 the banks would have had you and I believe that sub prime mortgage bundles were AAA rated and financial institutions were immune to bankruptcy.

Whatever the central bank sets rates at will not be relevant IF capital markets dry up. The danger this time is if China goes into a prolonged stagnation/recession and if there is a shortage of parties out there willing to lend money.

People are acting right now as if 0% rates are normal. Maybe they will be but if they are not then anyone with debt on a variable rate could be in big trouble.

Cheap money over 10 years and there's only one direction for rates to go

Great deal ! Thank you

I don't think interest rates are going to increase any time soon. Lots of people have bought properties on inflated prices due to help to buy scheme during last 2-3 years while stretching to the limits of their paying capacity. Any interest rate rise right now will push them out of their paying capacity and the result could be another domino style financial crisis just like seen in 2008. People on the driving seat know it well so the new mortgages are being issued with stringent affordability checks i.e. could the buyers still afford this mortgage at an interest rate of 7-8 per cent even though they are getting much lower interest rates at the moment.

To mitigate the defaulting risk of the mortgages already issued, all they have to do is to wait for the property prices to appreciate to a level where any payment defaults on these properties won't leave banks out of pocket. While London and areas around it have already appreciated considerably in last two years, other parts of the UK still have to catch up. BOE may wait before they increase interest rate till payment defaults no longer remains a problem for the lending banks.

This wait may get longer as the appreciation might slow down due to changes in buy to let regulations , so it could be a good few years before interest rates are increased again.

Having said all this, every individual's circumstances are different. For some people, capping risk is a good strategy by locking interest rate for a long time while for some, gains are in taking this risk.

I actually bought my own home using the new buy Scheme (now changed slightly and called help to buy), and their are pros and cons.

The pros I could not afford to buy a 2 bedroom apartment in London without it and I would have had to compromise on a lower priced / smaller property.

The Con is the government does own 20% of it when you come to sell it.
You also have to pay a bit more on interest as its a different package.

All in all, I am glad I took the opportunity to buy my first home 3 years ago as at current prices, it was a superb investment. Also I'm glad I used the scheme as if I had delayed, increase in prices due to cross rail would have made it more unaffordable later on. But if you can, Not having the scheme is better if the housing market increases.

Great deal. Superb bank. Hot from me.

Only 5.2%??! ONLY???

How did they know that your employer was a company owned by you?

Not that easy.. Have recently went through an application and this is basically the case with myself but have a much longer history than a few months as being employed by my company and am the only employee but they still classed as being self employed.

Good luck trying to get a mortage out of First Direct.

Read the original posts. His advice was to get the Help to buy ISA. This is the govt giving you 25% of what you saved AND YOU DONT PAY ANYTHING BACK

....thats right, many mortgage brokers dont have the deals available to them that are online which is why its a good idea asking the expert bargain hunters on here if they can find a good deal in comparison

Not sure if First Direct operate through brokers. HSBC never used to allow brokers to sell their mortgages but recently they changed - still restricted though only to Countrywide and L and C.

Very good discussion going on guys. Just trying to soak up all the info.

If someone didnt think rates would rise significantly for many years and had a very good LTV, whats the best deal in comparison?

great deal, thanks OP as its just in time for me!

It's worth making overpayments if you can, you would be amazed how many years overpaying just £100 a month knocks off the back end of the mortgage!

Take, for example, a couple in an area with a good school in a house that they see themselves living in for the long term where one partner has just fallen pregnant with the first of a few planned children.

For this hypothetical couple, knowing that they'll be paying 2.89% until the first child is 10 years old may be more desirable than paying 1% less for the next two years but facing a possibility of paying 4%+ during the years after the birth of their 2nd or 3rd child - just when one of them comes off the labour market and their budget gets a whole lot tighter.

This is a great deal . If I decide to leave my work and lose my 0.5 percent then I would definitely go for this or if the BoE rate raises to fast .

Skimmed through the posts. Here's our situation, we bought when banks were offering 110% mortgages, I didn't need to provide any deposit, and the deal even included giving us £700 towards moving costs up front as part of the package. Yes, I know many people will have some very negative things to say about that... however, at the time, I wasn't looking to buy a house, the wife just saw something in browsing and said lets go view to start getting a feel for things. So we did, knowing full well that we were not in any position to be putting up deposits and buying. I said to the agent after viewing that I didn't have a deposit and such and were not planning on buying so soon, but if they could get me a mortgage, then done deal. I never ever expected to get one. Well, they managed it... I couldn't believe it!! This was a good 10 years ago.
For us, it was a bit of a blessing, we managed through the rough financial times over the years, but maintained things. It has been a cheaper solution than renting and all the negatives related to renting. If we had not bought then, and waited till we had the usual 10% deposit, I don't think even today we'd have been in a position to buy and get onto the property ladder considering we'd be paying around 40% more per month renting also.
At one point because of issues in the neighbourhood, (all resolved now), we wanted to sell up and look for something else, I think about 5/6 years ago. They valuated the property at about £30k less than what we paid for it, and advised we were best off staying put. Today, we can get about £50k more than what we paid. Only trouble is, we're on about a 4.7% rate. Not fixed or tied in.
Something like this deal would be tempting to me, but I have no clue how these things work when it comes to changing mortgages so will stay put for now I guess.

Anyway, just thought I'd share that is all. ;-)

Bells boys you are correct, you don't have to pay ANYTHING back with the Help to Buy ISA. :smiley:

However with the 5% Help to Buy deposit you do have to pay some money back to the government when you are selling the property.

Hi, I'm a first time buyer and I'm hoping someone could explain why the 10 year deal won't be good for someone who isn't buying a forever home? I'm looking to buy a house worth £105k with a 75%LTV. It won't be something I envisage living in for 10 years, but definitely at least 5. Your help is appreciated!

Are we talking about the same product here? I'm talking about the recently introduced Help To Buy ISA which pays certified FTB 25% of the amount they have saved in one of these ISAS up to a maximum of #3,000. Could you provide a link which states this has to be paid back at a later date?

No offence, but you should not give financial advice. HTB is NOT free money - you have to pay it back and the govbankerment own the percentage in your property. So 20% on 200k, if 250k in later years the have a claim on 50k. Meanwhile, you start to pay back the loan after the first 5 years and it must be fully paid by the termination of the mortgage. Look it up.

I have advised my kids against this and I urge others to do the same, this is a huge financial mistake - don't fall for it!

Seems like all of these mortgages of 75% & 60% LTV are aimed squarely at the Help To Buy schemes. I'm yet to buy my own place, seems tempting...

Speculation obviously but....
http://www.telegraph.co.uk/finance/bank-of-england/12150486/Markets-rule-out-UK-interest-rate-rise-until-end-of-decade.html

Seems like a very good deal if you genuinely expect to be in the same home for at least the next 10 years. Thankfully, i expect to be mortgage free in 3 years time.

For info, this is what you would pay on this deal over 25 years,

Borrow 75,000.00 100,000.00 125,000.00 150,000.00 175,000.00
Per month £351.38 £468.51 £585.64 £702.76 £819.89
Total 25yr £105,414.71 £140,552.94 £175,691.18 £210,829.41 £245,967.65

But not all do. Ultimately if you are saving 1000s every year of interest then who cares about a £500 to 2k set up fee each 2 years, that fee can also be added to the borrow amount.

Even survey fees and any required valuation is often part of a deal where you only pay that back of you sell within x months, otherwise you don't pay a penny. Any legal fees also covered when remortgaging.

Also when I moved I went into temporary accommodation between moves so couldn't port mortgage, if I'd have gone for one with a high erc I would have been stung.

Definitely worth looking into all options. But I know I've saved loads doing shorter mortgage deals so far, not least because my LTV went up between them so I could move to a better deal

Yes, we do follow the Yanks. And the next move up is years away, and only after the next move which will be down

http://www.cnbc.com/2016/02/11/interest-rate-futures-not-seeing-rate-hike-until-2018.html

I used Help to Buy, brilliant scheme, meant I could put in 5% (still put in 10) and leave the rest of my money in the bank. No harm in that! :smiley:

Your advice would only result in the people who listened to you still paying more for their property (if your theory holds up because let's be honest 'free' money from the Govt is going to prove very popular) but not getting any extra financial help to buy their property. Plus prices have gone up already/are going up due to the pension lump sum cash in changes. In summary it is very bad advice...maybe you live in London?

Some great rates around atm ..... just need to find 25% of the ridiculous house prices in the SE

Help to buy is a SCAM. Nothing to do with getting people on the ladder. More about the government helping their friends in the house building trade sell overpriced shoeboxes and boosting their profits. If you look back, builders hiked their prices by about 20% when Htb was introduced.

My advice, stay clear and keep saving hard. Don't get pressured by friends and family into getting onto the property ladder which is doesn't exist anymore - for most it only has one rung.

He meant tracker lifetime variables not standard
And in answer to the Japan being 0% for 20
Years well the US has already raised and started raising interest rates and guess who do we follow. It's not Japan for sure. U only have to look at how the sterling crashed against the dollar recently leaving the UK no choice but to have to raise rates at some point as if the dollar keeps going up due to Americans raising rates the sterling will keep loosing value fast, it's now 15-20% loss in value against dollar from what it was few weeks back

So typically the cheap rates u r talking about are 2 years long so over 10 years u pay 5 times booking fees plus 5 times surveys plus 5 times legal plus 5 times painful lengthy applications . Obviously u could just stay with the same lender but many including lloyds Halifax do not allow u to choose from rates available to new buyers so u r forced to remortgage elsewhere to get cheaper rates in those instances

Houses will probably crash in price soon.

By the time this base rate picks up the majority of low interest rate tracker mortgages will have been paid off..
Would love to get a lower base rate tracker, currently on 1.5 + Br and 35% Ltv

Totally agree and just sharing my experience - we were stretching ourselves and I remember when I applied for my 10 year fix I could have had a capped deal for 0.3% more (and taken some advantage of falling rates) but didn't as I was being told there is no way rates can fall! I now realise that astrologers only exist to give financial market predictors creditability - treat with caution as you appear to be.

Most residential mortgages don't allow you to rent the property anyway. Otherwise no one would bother with B2L mortgages which are often more expensive.

Seams a great deal to me, same rates for 2 years fixed and usually cost 1k fee, so if you ask me this deal saves you 5k in fees straight away...

Personally I'm after a lifetime tracker 60+ltv but I'm stuck with Natwest as they were the only mortgage who would touch us with 4 dependencies,
Others said we couldn't afford it due to dependencies. Personally I think were screwed when are fixed runs out in a couple of months :disappointed: probably stick us on SVR now they got us.:confused:

cant see it on their website to take advantage of it my ltv is 49%

In theory, but it's at discretion of the lender

See the following, which actually refers to First Direct's policy on this

http://www.moneysupermarket.com/c/news/beware-the-portable-mortgage-trap/0010203/

Changing our mortgage soon, interested in 10year fixed deals being so low interest at the moment, read this article...

https://www.unbiased.co.uk/news/tempted-by-a-10-year-mortgage/3722

...but still none the wiser as I'm a bit clueless with mortgages... any views on the article? Rates they desribe would be relative I guess

Cracking deal, I hope rates like this are around in summer when I plan on moving. 10 year fixes are fine if like me you're planning on moving to a house for the long term. On my last 5 year fix I paid off about 50k (Inc overpayments), so for me taking out a £100k mortgage a 10 year fix would be fine.

Changing our mortgage soon, interested in 10year fixed deals being so low interest at the moment, read this article...

https://www.unbiased.co.uk/news/tempted-by-a-10-year-mortgage/3722

...but still none the wiser as I'm a bit clueless with mortgages... any views on the article? Rates they desribe would be relative I guess

Just to add a few circumstances where you may want to/need to terminate a fix early:

1. You need to sell your home due to job move abroad (some people don't want to let their home out)
2. You need to sell and during the process you want to or are pretty much forced to "break the chain" by selling chain free
3. Divorce, if both partners want to move out and have their share of equity in cash
4. You need to let the house, but the lender refuses permission or sets an unacceptable limit on how long you can let it
5. Interest rates drop and the rate turns out to be really high (probably unlikely with this one)
6. You want to move upmarket but the lender refuses extra lending

There may be more - not saying this isn't a good deal, but 10 years is a long time and such long fixes need a lot of thought.

I'm not going to bite on a comment obviously made to invoke senseless debate over the lack of ambition and morals in those that see benefits as a long term planning solution.

Benefits.

Is this mortgage not transferable to another property if you move?

We probably won't be stretching ourselves but still looks a good deal. By fixing for 10yrs it means no fees for 10yrs whereas the best shorter term fixes could easily swallow a couple of grand over 10yrs which eats into the saving on rates unless you are borrowing a large sum.

My expectation is that rates will be higher in 5 yrs time and that the extra cost over the next few years will get repaid in the longer term. Obviously, I would run some scenarios with the best products on the market for comparison however.

Seems like a decent deal. I'm on a BOE base rate tracker which has been 0.5% for many years with no arrangement fee or charges. Don't think I'll get anything better. What will happen if our rates turn negative like they are in Japan, say -0.5%. Would the bank pay me interest if I'm on a base rate tracker?

Why would an IFA advise someone against taking out a Help To Buy ISA?? They are a no-brainer. My son & his intended have each just taken one out with the Halifax (currently paying 4% interest but it is variable so he will be keeping an eye on that). Effectively the interest works out at 29% or thereabouts when the Govt put their 25% (up to 3 grand each) in.

Brilliant deal and should hit 1k+ heat. Similar headline rates were available around this time last year but the fact this product has no fees and very low ERC makes it a winner in my eyes. If I was taking out a mortgage today I'd get this - just got to hope it is still around when we look to move in about 6 months time.

edit: reading the small print one thing I did notice was that the ERC applies to the original mortgage amount so if you took out say a £500k mortgage over 11 years and repaid it after 9 years you'd be getting seriously screwed over as you'd have to pay a £10k ERC. Not sure how this compares to other lenders but I think Halifax may charge based on how much you owe, not what the original amount was.

I might be able to afford a mortgage if I stopped looking on hukd and finding other things to waste my money on.

This sickens me.

Signed up to a 10 year fixed rate at 5.84% with Cheshire BS in 2007, literally months before the collapse of Lehman Brothers and the global financial crisis. had to put up with gloats of people and their 0.5% above base rate ever since.

Interest rate rises are not the only thing this offers protection from. Take a short fix or discount and come remortgage time should your circumstances or the lending rules have changed you can be trapped on a very pricey lenders svr....

Yes - 10 years is a long time. We're already 7 years into this practically zero rates gig, which is very nearly a 'long time' and Japan is 20 years into their no inflation gig...

Go figure

ive been looking at mortgages none stop all week. Been over paying since we come off our 5 year fixed (4.79%) santanders is just over 2% on the variable and ive kept the payements the same as before and adding a bit more to it so we can pay it off a bit quicker. our LTV is really good probably about 30% in a couple of months so hoping the rates stay low for the next 10 years and i can pay it off when im 50.

Surely it guards against inflation as well- if your paying £520 a month now £520 will be worth less in 5 and 10 years time I expect? I may be wrong, it wouldn't be the first time.

Well the average marriage in the UK lasts 11 years so perfect timing, just as the rate expires you'll have to give the house to your ex wife anyway!

The answer to this is pretty straightforward - because 60% LTV already means that the borrower has access to the best deals.

Securing a 2 year fix now and paying down to a lower LTV doesn't mean that the borrower will have access to lower LTV products with better rates.

Sweden cut their rates to Minus 0.5 % this week. UK rates could go even lower.

And they have a repayment mortgage (rather than a dodgy interest only) - win, win.

My view - this is not a good deal.

Why would someone with 40% equity (regarded as a big deposit) tie themselves into a 10 year fix? After 5 years they might have 50% equity and growing more as each year passes. A borrower with this level of equity is very attractive to all lenders so you would always get access to the best deals.

Obviously this all depends on what the Bank of England base rate does - but IMO there won't be much movement from the current 0.5% in the next couple of years.

I generally fix for a couple of years and been happy with this.

It's true that a lot of people were burned in the past but the chances of being burned to the same extent are slim-to-none at this rate.

For example, you are paying about a 2.5% premium on your fixed rate when compared to typical 2 year rates. In order to be paying the same premium on this product, shorter term fixes would need to drop to 0.39%.

I think short term rates have reached a floor so, whilst they may not rise for some time, they are unlikely to drop much, if any, further.

That means that, in the unlikely event that they didn't rise for 10 years, a borrower taking out this product is paying nowhere near a 2.5% premium but, instead, much closer to 1%.

Shame it's only for 60%,my son and his wife are saving like mad for a deposit on their first home.
Deals like this would really attract first time buyers and without them, everything slows down.

decent deal

Good fixed deal but it would help remortgage customer if they can just shift the balance similar to CC balance trf as long as they meet credit score not list of income documents, statements, CC details etc. the whole lot to be offered. They would already have paying history from previous lender for affordability.

Sounds good

Mort Guage
Debt till death
New World Order

And yet, as repeatedly predicted, rates have gone nowhere for 7 odd years, and look set to go exactly nowhere. Feel free to bookmark my post so you can see how right I am in 2-5 years time

The UK is bust if rates rise to any degree any time soon. It's the threat of an imminent rise that keeps the market for these products active. Check news reports for the last few years and see the number of times we have been told a rate hike is due this month, or next quarter or imminently, then suddenly something happened to make it not so.

In a remarkably stupid move the US touched their rates up recently. It caused chaos and will have to be undone in very short order.

My IFA recently advised me to steer away from any 'help to buy' schemes, and I agree with him. Since when did the government wish to help out exactly? :wink:

Some are suggesting there could be a reduction in the BOE base rate
That may be why a sub 3% 10 year fix has reappeared.

It does provide some security especially if the housing bubble bursts in the next 10 years and you don't have such a good LTV.

I'm not sure what to do as have a lifetime 2% tracker and the facility of a mortgage holiday which not many new mortgages have now.

This shows a lack of understanding of financial markets. The bank actually sell on the debt immediately and their profit is guaranteed regardless of the direction of rates. Their only problems will arise for borrowers who stop paying - a matter that is, for the most part, unrelated to the future direction of rates. Indeed, the risk of default is likely lower on a fixed rate than it is on a rate with no theoretical upper limit.

With the above in mind, your argument changes to that of thinking rates are going nowhere because availability of a 10-year 2.89% rate shows you where investors in debt, not the bank, think rates are going.

The major flaw with this argument is that it assumes that investors don't get it wrong. Another flaw is that investors don't even need to get it wrong. Take, for example, a pension fund that's trying to offer pension payments to a group of people based on a £2 billion fund balance. Such a fund may invest £1 billion in the debt market at 1.5% fixed for 2-years and £1 billion at 2.89% fixed for 10-years. This doesn't necessarily mean that they don't think rates will rise - just that they need a better return on their capital in the near term in order to meet their pension payment obligations.

​and it will be more desirable in 10 years time...

10 years is great till something better comes along and you stuck with this. Better till divorce comes along and your stick with this. Better until you need to withdraw equity to help kids and your stuck with this. Better till you need capital and your stuck with this. Better till you want to emigrate And your stuck with this. Banks are offering this because rates will stay low. Someone will be getting a large bonus for selling you this multiple times over. This is 1% more than a cheap tracker that's £100pm on my mortgage that pays for a small brand new car for the next 10 years renewed each 3 years. Think about how much you want to be shielded.

Ignore

It's a better investment than a wife as you get something back when you paid into it for years

Do you have to bank with these guys or can you get the deal as a current non banking customer?

Could you move this mortgage if you moved ? (Hope it is not a daft question!)

These fixed rates are always portable if you move home. Yoi just port the mortgage across. So no idea why everyone here is making a fuss of stating these wont be suitable if u r still moving up the property ladder etc etc

Really? People are paid to take out mortgages in some countries in Europe like Denmark for example, you never know.

In some respects similar to having a WIFE then?

The 75% LTV fee-free version is only 0.1% extra at 2.99%.

Tempting, I'm on 1.79 tracker at the moment with FD.