Mortgage advice

Skint2022 · 2023-01-21T21:36:22+00:00

Sorry I’ve posted on money matters but posters are few and far between. So am I being unreasonable to consider remortgaging for any of these deals below? We can lock them in now and start them when our current fix ends at the end of April. Or should we wait until then in the hope that it will come down? Or will they go up because the Bank of England rates are going up? 10 year fixed - 4.15% extra £77 extra per month 5 year fixed - 4.36% extra £90 per month 2 year fixed - 4.83% extra £120 per month Current rate 2.89%

Didimum · 21/01/2023 21:41

Why can’t you apply for one now and then another if rates have fallen further closer to the time? That’s what we’ve done.

In any case, I would go with the 2yr fixed. I don’t think rates will comes down as low as they were before, but I don’t think they will remain this high. I wouldn’t lock yourself in for too long.

Original poster

Skint2022 · 21/01/2023 22:05

@Didimum on really can I do that? Oh goodness I wish they taught these things at school 😂🙈. So if I accept the 2 year fix I can then change it again?

OP posts:

AfraidToRun · 21/01/2023 22:11

It should be possible yes. Do you have a broker?

I wouldn't fix for ten years but they are some good rates at the moment. 2 years would probably be what I would go for. If the market continues to stall rates will likely drop when mortgage lenders try to be competitive.

Didimum · 22/01/2023 07:33

You don’t have to accept it til the offer expires, which should 3-6 months after they’ve offered. Just keep your offer and only accept if another deal doesn’t arise in time.

BashirWithTheGoodBeard · 22/01/2023 07:43

If there are application fees you may end up having to pay more than one if you do this, but yep nothing to stop it.

That being said, I wouldn't expect rates to be falling in the next couple of months. But if you think they will later on and you want to take a punt on that you can always go on the SVR for a bit after April.

Nw22 · 22/01/2023 07:47

@Skint2022 who is the 10 year rate with?

yousmellnice · 22/01/2023 07:48

I wouldn't go for 10 years personally.

FabbyDab · 22/01/2023 07:51

I think in this situation people also need to consider what their overall household budgets can absorb. So if you can afford the extra £77 now and likely for the next 10 years at a rate of 4.15%, but definitely could afford your mortgage if it went above 5% then it makes sense to commit to the 10 yr, and accept that you may be paying a bit higher if rates come down.

If you can afford your mortgage at above 5% then you're in a better position to take a risk with sticking around on a variable or going for something shorter term.

kasho5 · 22/01/2023 07:52

Rates aren’t going to come down in the next few months but I wouldn’t lock in a rate for anymore than 2 years personally you just don’t know what is going to happen in the future

FabbyDab · 22/01/2023 07:52

You also need to consider arrnagemrnt fees etc. If you're paying £499/999 arrangement fees every 2 years they will soon add up too.

LadyLolaRuben · 22/01/2023 07:58

Never take more than two years fixed rate. Banks are there to make money. If they think rates will rocket over the next 10 years, they wouldn't be offering a low 10 year deal because doing so would mean losing money

BashirWithTheGoodBeard · 22/01/2023 08:04

FabbyDab · 22/01/2023 07:51

I think in this situation people also need to consider what their overall household budgets can absorb. So if you can afford the extra £77 now and likely for the next 10 years at a rate of 4.15%, but definitely could afford your mortgage if it went above 5% then it makes sense to commit to the 10 yr, and accept that you may be paying a bit higher if rates come down.

If you can afford your mortgage at above 5% then you're in a better position to take a risk with sticking around on a variable or going for something shorter term.

I agree. It's about personal factors. Income but also tolerance of risk. Is it more important to have security over a longer period or would you find it harder knowing rates went down and you'd missed out because of caution? There's no right answer, only a right answer for you.

SomethingWycked · 22/01/2023 08:08

Divide any arrangement fee by the number of months the fix is for i.e

5 year or 60 months £999 ÷ 60 = £16.65 a month.

I found it cheaper on the amount we owed to pay a slightly higher interest rate that was fee free.

yousmellnice · 22/01/2023 08:10

FabbyDab · 22/01/2023 07:51

I think in this situation people also need to consider what their overall household budgets can absorb. So if you can afford the extra £77 now and likely for the next 10 years at a rate of 4.15%, but definitely could afford your mortgage if it went above 5% then it makes sense to commit to the 10 yr, and accept that you may be paying a bit higher if rates come down.

If you can afford your mortgage at above 5% then you're in a better position to take a risk with sticking around on a variable or going for something shorter term.

Yes its a very personal situation isn't it.

DottieUncBab · 22/01/2023 08:15

FabbyDab · 22/01/2023 07:51

I think in this situation people also need to consider what their overall household budgets can absorb. So if you can afford the extra £77 now and likely for the next 10 years at a rate of 4.15%, but definitely could afford your mortgage if it went above 5% then it makes sense to commit to the 10 yr, and accept that you may be paying a bit higher if rates come down.

If you can afford your mortgage at above 5% then you're in a better position to take a risk with sticking around on a variable or going for something shorter term.

Exactly this, if you want certainty and that’s important to you then go for the 5/10 year fix. It may be that the extra £77 is really affordable to you In which case I’d go with a longer fix - but that’s because certainty of my monthly cash flows is important to me. But ultimately it’s a personal thing and depends on what your appetite for certainty versus your view on future interest rates etc.

PurplePinecone · 22/01/2023 08:15

I think it's telling that the 2 year fixed is higher than the 5 and 10 year fix. I'd say that means the bank's think the rates might go down within 2 years. So you definitely don't want to be stuck in a 5/10 year fixed paying a high rate when the rates start going down.

I would apply for the 2 year rate and wait and see what happens. I'd be tempted to stay on the variable rate in the hope that the base rate starts going down.

BG2015 · 22/01/2023 08:18

I took out a 7 year fixed rate at 2.39% in 2020. So glad I did.
I think interest rates are going to go up again and remain high for a while yet.

I only have 9 years left on my mortgage now, the end is in sight and I'm overpaying every month too.

DashboardConfessional · 22/01/2023 08:19

We fixed for 10 last year, but that was at 2%. At the moment, I'd do 2 years max. The rises of the BoE base rate - think there will be one more rise - are already baked into the current rates and they are now going down (but unlikely anywhere neat 18 months ago when there were 5 year fixes at 0.99%).

catchthedog · 22/01/2023 08:24

@LadyLolaRuben there are a lot of people who took 7 and 10 year fixes over the last couple of years at around 2.4% who are very glad we did!

at the moment I'd not go higher than 5 yrs on current rates and the forecasts out now.

4 ish percent is still quite low compared to what it could be though.

pompomdaisy · 22/01/2023 08:44

I'm glad a took a 5 year fixed at 1.99% 4 years ago but the next time I will either get a tracker or 2 year fixed.

Hack221 · 22/01/2023 13:36

Are these rates from all lenders or is this just what your current lender is offering you?