Personally, I prefer the 0.8% lower 5-year fix and using the 0.8% as overpayments. That way, at no extra cost, you will have paid off 4% (0.8 * 5) of your mortgage balance over the five years. I'd be very surprised if you ended up worse off when remortgaging to another 5-year fix in 2021.
Using overly simplified maths to make it easier to understand (the actual figures will vary slightly depending on term left to run), a 5-year fix in 2021 would need to cost over 3.6% to make the 10 year fixed rate option pay off - basically, the 2.79% you'd be paying on the 10-year fix plus the 0.8% extra you paid during years 1 through 5. I believe 5 year fixes will cost significantly less than 3.6% in 2021.
jamesmoorers
18 Aug 164#46
Oh the outrage that people want to make money. What a society we live in.
It isn't over valued if that's what people will pay, almost everything in this world is priced based on supply and demand.
I got most of my house deposit together working at Sainsburys while getting a degree. If I wasn't studying, I was working, including 60/70 hour weeks during holidays.
Everything is always someone else's fault, right?
fireman1
17 Aug 164#41
Yes, because there really is a shortage of houses available. I looked on rightmove earlier and there was only a few thousand for sale in my city. I better get one quick before they all get sold for buy to let before the weekend.
All comments (67)
marathonic
17 Aug 165#1
Some people prefer longer fixes such as the fee-free 2.79% 10-year fix posted below:
Personally, I prefer the 0.8% lower 5-year fix and using the 0.8% as overpayments. That way, at no extra cost, you will have paid off 4% (0.8 * 5) of your mortgage balance over the five years. I'd be very surprised if you ended up worse off when remortgaging to another 5-year fix in 2021.
Using overly simplified maths to make it easier to understand (the actual figures will vary slightly depending on term left to run), a 5-year fix in 2021 would need to cost over 3.6% to make the 10 year fixed rate option pay off - basically, the 2.79% you'd be paying on the 10-year fix plus the 0.8% extra you paid during years 1 through 5. I believe 5 year fixes will cost significantly less than 3.6% in 2021.
robinscp1979
17 Aug 16#2
Does anyone know the best deals for a 75% LTV?
marathonic to robinscp1979
17 Aug 16#3
That depends on whether you're looking for a fixed, variable or tracker rate, how much of a mortgage you are looking for and whether your personal circumstances deem you acceptable to the various lenders.
ghunj
17 Aug 16#4
BOE is likely to drop interest rate again very soon. Do you think it would be worth waiting as banks may follow downwards with mortgage rates?
marathonic to ghunj
17 Aug 161#6
It depends on what rate you're on now or, if you don't have a mortgage yet, whether you have a house in mind that you'd like to purchase.
The widespread opinion among economists is that rates will drop in December to 0.1%. That's only a 0.15% drop.
It's much easier to see the reasoning behind expectations of rate drops influencing your thought process during application for a mortgage when rates are dropping from 2%+ downwards. From current levels, I wouldn't let expected interest rate drops influence your decision TOO much.
RudeYute
17 Aug 16#5
I was accepted on Coventry's five year fix at 2.24% (65% LTV), which has now dropped to 2.04% (as of yesterday), but think it makes sense to go for a tracker atm.
Given that BOE rate is likely to go down again, before going back up, and the fact that my mortgage has already been approved by Coventry, I decided to stick with them, and think the following is pretty good atm instead:
+1.35% Bank Base Rate Flexx Tracker to 30.09.18
The plan is to move to a new deal (likely a fixed rate) by the end of the two years. In the meantime, I can take advantage of the BOE rate drop. I know there is a risk rates could go up in that time, but i am willing to take that risk. Even if they do go up another 0.25%, I would be better off than I would be on the 2.04% fix.
marathonic
17 Aug 163#7
First Direct have an excellent fee-free rate at 2.18% for 5-years for a 75% LTV.
robinscp1979
17 Aug 16#8
I have a really good credit rating and I am looking to re-mortgage on a fixed rate. I am currently on my banks variable rate and free to move. I currently owe 96k
egrayn
17 Aug 16#9
How do the maths stack up against the Coventry BS 2.39% 10 year fix with £999 fee?
FTOdude170
17 Aug 16#10
isnt the HSBC 1.79 tracker for life worth a punt though, with our assumations of the BOE rate atm?
lanc1979 to FTOdude170
17 Aug 16#17
The advice used to be to get a tracker when rates were high, as you'd benefit from a drop but unlikely to rise higher (except the late 80s). Plus the +% was lower. Fixing when rates are low seems to be the better approach.
I'd be nervous about getting a tracker in such an unstable climate - Brexit will happen within 3 years and who knows what's that's going to do. But a drop of more than 0.25% (ie to negative rates) is highly unlikely (but who knows).
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Opening post
However, it requires a 50% LTV so only suited to those with big deposits or plenty of equity in their homes.
There's also a 1.89% 5 year fix with a £999 fee but this would require a mortgage in excess of £200,000 to be the better choice.
Another interesting product is the 1.99% fixed rate to 31.12.23 with a £999 fee - a fix of a little over 7 years.
Top comments
2.79% 10-year Fix
Personally, I prefer the 0.8% lower 5-year fix and using the 0.8% as overpayments. That way, at no extra cost, you will have paid off 4% (0.8 * 5) of your mortgage balance over the five years. I'd be very surprised if you ended up worse off when remortgaging to another 5-year fix in 2021.
Using overly simplified maths to make it easier to understand (the actual figures will vary slightly depending on term left to run), a 5-year fix in 2021 would need to cost over 3.6% to make the 10 year fixed rate option pay off - basically, the 2.79% you'd be paying on the 10-year fix plus the 0.8% extra you paid during years 1 through 5. I believe 5 year fixes will cost significantly less than 3.6% in 2021.
It isn't over valued if that's what people will pay, almost everything in this world is priced based on supply and demand.
I got most of my house deposit together working at Sainsburys while getting a degree. If I wasn't studying, I was working, including 60/70 hour weeks during holidays.
Everything is always someone else's fault, right?
All comments (67)
2.79% 10-year Fix
Personally, I prefer the 0.8% lower 5-year fix and using the 0.8% as overpayments. That way, at no extra cost, you will have paid off 4% (0.8 * 5) of your mortgage balance over the five years. I'd be very surprised if you ended up worse off when remortgaging to another 5-year fix in 2021.
Using overly simplified maths to make it easier to understand (the actual figures will vary slightly depending on term left to run), a 5-year fix in 2021 would need to cost over 3.6% to make the 10 year fixed rate option pay off - basically, the 2.79% you'd be paying on the 10-year fix plus the 0.8% extra you paid during years 1 through 5. I believe 5 year fixes will cost significantly less than 3.6% in 2021.
The widespread opinion among economists is that rates will drop in December to 0.1%. That's only a 0.15% drop.
It's much easier to see the reasoning behind expectations of rate drops influencing your thought process during application for a mortgage when rates are dropping from 2%+ downwards. From current levels, I wouldn't let expected interest rate drops influence your decision TOO much.
Given that BOE rate is likely to go down again, before going back up, and the fact that my mortgage has already been approved by Coventry, I decided to stick with them, and think the following is pretty good atm instead:
+1.35% Bank Base Rate Flexx Tracker to 30.09.18
The plan is to move to a new deal (likely a fixed rate) by the end of the two years. In the meantime, I can take advantage of the BOE rate drop. I know there is a risk rates could go up in that time, but i am willing to take that risk. Even if they do go up another 0.25%, I would be better off than I would be on the 2.04% fix.
I'd be nervous about getting a tracker in such an unstable climate - Brexit will happen within 3 years and who knows what's that's going to do. But a drop of more than 0.25% (ie to negative rates) is highly unlikely (but who knows).