To ask what you’re doing about your mortgage?

[Franklyfranky]

my 2% fix expired last December, enter massive rate shock as my repayments went up by £550. Dh was insistent rates would come down so we went for a 2 yr. the 2 yr expires in October (funding tranches) and I wish we we for a 5 year.

i can’t really justify paying the erc on the deal to move to a 5 yr now which would be about £1500. I’m hoping things calm down But given where rates are heading… womp womp

those whose deal is ending this year, what are you planning to do? I’m debating a PT to a tracker

@Raindropskeepfallinonmyhead

I was 1.44 so similar jump. It's about £200 for me - I can afford it but as a single parent with eldest starting uni this year there will be a lot less going into savings than there has been (and I know I'm lucky that's all that's impacted)

Which provider is doing 3.7 % please? Our fix ends in March and I think we're going to go for a fixed 5 year. NatWest I think has something around 4.08. Did you secure that rate a while ago?

But no-one in their right mind would agree to lend someone money at a 3% rate for the next 25-30 years. If someone came to you and asked for 25,000 at 3% for the next 25 years - would you lend it to them? The rates need to work for the people lending you the money too - and at the moment they can get good rates elsewhere (globally interest rates are rising, because Trump is going to cut taxes & need to borrow lots of money)

It works in the US, because the US government guarantees the lenders (FANNIE MAE & FANNIE MAC)

We are doing ours soon and will be fixing for 5 years. The 5 year fix is more expensive. I'm sure rates will come down in that time but we need to do some additional borrowing to finish doing the house up so our LTV is going up quite a bit, and house prices haven't been great our way. It's a big jump for us so we want the cheaper rate. We can afford the 5 year fix and I'm hoping in 5 years time we'll have built a good amount of equity in the house between repayments and the work done that we'll have more flexibility. So just going to accept our payments in the meantime, and try not to look at the financial news 🙈

Sorry the 5 year fix is cheaper meaner!

Mean

So the plan is, I’m going to call my lender and see how I go about a switch this early and see how long that key fact illustration guarantees the rate for without me paying anything at this point. With a watch eye on swaps after the inflation announcement and in the run up to the mpc meeting

i think i can do it online but i think that would be instant which is not what i want but the hole in my plan may be the availability of a mortgage advisor to call me back

But just not how banks operate though to lend at 3% at every term the bank would be losing money (unless you had a sky high fee)

Our initial 1.2% fix (arranged in 2019!) runs out in April. I went to London & Country in October and they found a new 3.9% five year fix for us then, which we are due to move to in April.

The minimum payments will be an extra £250/month for us, which isn't particularly great but not unmanageable. We could have increased the term to get the monthly payments down but thought best to try and pay it off as quickly as we can.

We had almost exactly the same

Although it's gone up a bit from what it was (1.9%) I'm relieved it's affordable for the next 4.5 years at least

Our rate expired a few years ago and we left it as it is. The rates shot up with Truss, came down slightly afterwards, went up again with Sunak/Hunt and stayed there until Labour came in. It then started to drop, the last reduction at the end of November.

We are now on a much lower rate than when Truss came in.

I'm a higher rare tax payer? That's what £20k ISAs are for.

And outside of isas can still earn + £500/y interest tax free.

I've gone over that by £120ish this tax year but paying 40% tax on that is £48 .... which is still far better off financially

(if you take say 40% off a 5% savings account are still getting 2% interest, which is higher than the 1.x you are saying by paying the mortgage down. It's just basic maths

Tbh the best actual financial advice is loading stocks and shares isa but I'm a bit of a wimp on that front atm so only pay 4k into Lisa 2k into normal s&s isa but appreciate makes more financial sense to put more into this than cash/mortgage payments

Inflation came down… reeves may keep her job (for now)

I was speaking to another parent who's a mortgage broker, they thought rates would drop around Christmas (this was at the beginning of summer) obviously everything has changed.

Our current rate (1.79% 😭) expires in March, so I've been monitoring the rates and they seem to be slowly coming back down. Inflation was slightly down this morning, there's talk of an interest rate cut in February so I'm trying to hold my nerve.

We have to stay with our current lender because of our personal situation (self employment/foreign income) and we get a preferential rate if we pick a 5 year one.

The current rate is 4.59% is that gets somewhere closer to 4% I'll be happy.

I don't know why it feels so bad, when we bought our first house the interest rate was 5.75% and it was 3.something when we moved to this house, so it's not like I've only ever experience low interest rates. Was just wishing it was closer to 3.5 not 4.5.

I re-fixed my mortgage at 3.99% in May 2023 for 5 years. I've been monitoring rates since then and wondering if I'd be paying over the odds for a few years given predicted cuts but I'm happy having the certainty. I'm hoping with overpayment that this will be my last term.

Did a 10 year fix in 2018. Felt odd at the time but turned out to be a good call…

I think you'll find Liz got there first!

And in fairness to them they were right, they just might not stay down

Given the fall inflation in the news today it's mooted that there may be a cut in the bank base rate shortly.

Yep - but the bank base rate only impacts SVR. Most mortgages are set by the rate that the bank can borrow the money at (the swap rate) to match what they are lending you (so 2 year/ 5 year rates)

My fixed rate ended in December and my new payments are £120 lower. I went for a two-year and have no regrets; I made sure I could afford the mortgage at very high rates before I took it on.

Of course the simple maths of saving in a higher interest rate account is correct.

Maybe for some people it's the assurance that the money is going to the right place rather than running the risk of it being diverted to a fortnight in the Maldives

Can I recommend Gary's Economics for a real sound cue of the economy in general.

My overpayment of my mortgage is part of my financial strategy and retirement planning. Upping my saving and increasing my pension contributions and mortgage repayment so I can retire in 4 years at 65. I have a financial advisor so it's part of a plan we have put together.