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Mortgage rate head fart

(3 Posts)
notafeckingclue Sun 20-Sep-09 21:06:03

My heads in a whirl - we need to remortgage to raise funds for an extension - mortgage is relativly low and were currently on 1.5% variable but willl be doubling our lending - to be abe to afford to live comfortably and happily we are considering a full remortgage rather than an additional loan - i am clueless - should we fix and if so for how long would you as i keep reading scarey threads about 12% etc - am tempted to fix now for 2-4 years but dont think rate will shoot up in next 12 months so would potentially miss out on variable savings. God someone educated please help me.

notcitrus Sun 20-Sep-09 21:39:21

Having just been through all this with our pet mortgage adviser (found via an ad years ago, he's done all our paperwork since).

Right now fixed rates are quite expensive because people think rates will go up in about a year's time, and possibly then a lot. So if you fix for say 5 years it's a highish rate and large fee so may well not be much better off than having a variable rate. The fees are often £1000 so need to consier that. And if you fix or tie in for say 2 years, rates may be a lot higher then when looking for a new rate afterwards.

We decided to go for a 3-year deal as longer deals were stupidly expensive. Decided to go for a fix rather than tracker, and eventually stayed with our lender rather than pay fees to a new one to get a better deal, as the adviser did the sums and worked out that moving would save a whole £30 over 3 years, and saving fees now would be v useful (currently have zero savings!)

HSBC/First Direct are offering some good deals but are v slow, but may be better if you have accounts with them. Abbey are apparently shite and slow. Doesn't seem to be much competition at the mo. Are you likely to have more cash in 3-5 years?

nappyzonecantrunfortoffee Mon 21-Sep-09 12:32:59

abbey (sorry name changed) have offered us 3.89 fixed for 2 yr to stay with them which would make it all a bit easier. I know the sensible thing would be to stay on same motgage deal for outstanding and just re do the new amount but jeez it all makes for a hurty head.

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