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Original poster

Mortgages..........

26 replies

sammysam · 29/11/2007 16:00

In May our fixed rate mortgage is up.....we are a bit worried as all the interest rates have shot up in the 18months since we sorted ours out. It was our first house and is quite small.....we were hoping to be able to move next year as i'm expecting a bit of inheritance in the new year. we just don't have enough space now
but are we crazy to think that we would even have a chance of moving with all the interest rate increases?
especially now that i'm a sahm now so we don't have my income?
Hope this makes sense

OP posts:
Tinker · 29/11/2007 17:36

I think interest rates are more likely to come down rather than go up should inflation rise and and the housing market slow down. Wanting to move and being able to sell may be bigger concerns.

LilyLoo · 29/11/2007 21:25

Sammy my dp an advisor and he is saying he thinks it likely there will be two rate cuts in the first half of next year. If you want any advise whilst your looking into this you can get it here

yomellamoHelly · 29/11/2007 21:39

Have also heard there's going to be two rate cuts next year. In London and the South East house prices are supposedly going to continue to rise whereas elsewhere they're not going to change much over the next year and in some places will drop. Can't remember where I read all this, but was fairly recently.

Original poster
sammysam · 30/11/2007 09:50

just lost what i wrote!
Thanks all-is good to hear about likely rate cuts in the new year.
Selling may indeed be a problem, although as ours was and is an ideal 1st time buy, surely the drop in interest rates and the slow down or fall in prices will enable 1st timers to come onto the market? Or am i being naive?
We're in Poole, Dorset-doesanyone know the predictions for this area?

OP posts:
BigGitDad · 30/11/2007 20:49

If you are worried about the cost of the mortgage then you will need to consider fixing the rate since in my opinion you need to have security and peace of mind. Though you do mention you may recieve a lump sum, most mortgages will let you pay 10% a year without penalty even on a fixed rate though you will need to check that out.
I know people are predicting a cut in rates but if you read what the Bank of England have been saying over the last few days it is by no means certain, they are worried about inflation still.
Still you have until March next year to see what is what.

lalalonglegs · 30/11/2007 21:03

There are iFAs out there still happy to line up reckless multiples of income mortgages so if you really want to saddle yourselves with huge debts, don't worry - someone will be only to happy to help you for a couple of hundred quid commission (this is not aimed at LilyLoo's dp in any way).

There are masses of internet sites that will let you see how much your mortgage payments will be on amount you want to borrow depending on what interest rates are (google "mortgage calculators" or some such). I agree with BigGitDad that the BoE isn't keen to cut rates at moment - basics such as petrol and food are all going up and previous rate hikes have had desired effect of cooling housing market. Mervyn King is probably feeling pretty pleased with himself.

Personally, I think if you can use your inheritance to stay put and extend or create some extra space somehow, then that is a far better option.

Original poster
sammysam · 01/12/2007 08:48

Thanks all-I'll have a look and I suppose we'll just have to wait and see what happens over the next few months.....

OP posts:
Fizzylemonade · 02/12/2007 19:14

Sammy - I am not sure which mortgage provider you are with but our own fixed rate was up on 1st July BUT we arranged a new mortgage I believe 3 months before that date. As rates were rising we got a much better deal than if we had waited.

However, if the people in the know are prediciting rate cuts then you may be best holding out. I think we weren't tied in until we actually signed all the paper work so could still have got a better deal nearer the time.

I know our own IFA takes another look at the market just before we sign to see if there is a better deal.

Original poster
sammysam · 03/12/2007 09:21

Thanks Fizzy-I've kept telling dp we should contact our IFA but he says tis too early-but i think we should just to see what she says!

OP posts:
sarkin · 12/12/2007 15:42

This reply has been deleted

Message withdrawn

Botbot · 10/01/2008 08:58

Was going to start a new thread but thought I'd resurrect this one instead.

Our fixed rate mortgage is up at the end of February. I'm intending to stay with our current lender as they usually let you transfer onto one of their other products without incurring any costs, but I'm wondering whether to go for another fixed rate (which will obviously be much higher than the one we'll have just come off), or take the risk on one of their tracker/discount products, assuming that interest rates are going to go down rather than up over the course of this year.

Is anyone else in a similar position, and what are you planning to do? Fixed or tracker? Or something else I haven't even thought of?

lilyloo · 10/01/2008 20:56

Botbot if you want some free advice you can speak to my dp he has a new ad on the small buisness ad section here obviously you can still pursure with your current lender if he can't help you get a better deal but he can search whole of market for you.

jellyjelly · 12/01/2008 21:29

If the rates get cut is it likely that fixed rates will be about the same or are they liekyl to shoot up. My rate comes to an end in aug and i want to do a fixed rate but not sure if the fixed rates are likely to go up to cover it or down? Any thoughts pls.

BigGitDad · 12/01/2008 22:02

It will be a brave person who predicts which way interest rates will go, and I don't just mean the Bank of England rates.
yes the Bank of England may cut rates but to the average mortgage holder this may not make much difference unless you are on a tracker rate which directly follows the bank of England rate. Banks generally borrow off each other nationally and internationally to fund their mortgage lending and right now there is very little of that going on, This lack of confidence will possibly keep interest rates at the same level as they are now rather than reduce as we may hope.

Natasha1 · 16/01/2008 10:28

Some advice please also re fixed rate mortgages.

We have a 1% discounted rate off the variable rate, currently 5.7%, this will end in Nov this year so (going with present rate) would become 6.7%.

We can take a new deal now with our current lender, a 5 year fixed rate now at a rate of 5.45%, no ext tie in, admin cost to set up just £99.00. This to me seems a really good deal, just wondered what other people thought.

Or we could wait until Nov & see what else is about. But I think even it rates come down a bit we will still struggle to better this deal. Any thoughts anyone????

BigGitDad · 16/01/2008 11:17

That is a really good deal especially as the fees are low, you would struggle to get a better five year fix elsewhere without the fees.
You also have to ask are you prepared to tie in your mortgage for five years and is the mortgage portable, by that I mean if you move house can you take the mortgage with you. Also if you want additional borrowing further down the line how easly will it be to get additional funds?
The majority of my clients are still fixing as they want peace of mind given the market variation that has occurred over the last few years. I think you will get that with this deal.

Elphaba · 16/01/2008 11:26

oUR fixed rate has just come to an end and our new payments are over £500 more than they were before - ha ha! Just in process of changing mortgage now - although people are harping on about rates coming down, we are fixing again for 2 yrs - I'd rather know what is going out each month thanks! Still paying £200 more a month though - bang goes my shoes budget! Hehe!

Natasha1 · 16/01/2008 12:13

Thanks for that.

Something to think about BigGitDad, we may want to move in the next 3-5 years but we have a HUGE mortgage (well it is big enough for us thats for sure) so I don't know about any additional borrowing!!!

We may have to think about a 3 year fixed, their deal is 5.6% for 3 years all other details the same. Is this still a good deal?

I like the thought of 5 years because all my children should be at school by then, so no more costly childcare BUT maybe a 3 year is better option, really not sure. How long do most of your clients tie up for or does it vary. Thanks for all your help!!!

BigGitDad · 17/01/2008 20:44

Either deal is a good deal as there are no fees involved. (My clients are quite mixed really but if you are paying fees of nearly £1000 there is no point fixing for two years and then remortgaging again and paying out a whole load of another fees.)
Like I say if you can port the mortgage (move house with it) add to it if you wish, a five year deal is not a bad offer.
Either way really rates, will not go down massively from where they are now, but they do have the potential to go up. The gamble you have is that you will be over paying on your mrotagge rate if rates do go down, but most people are fixing for security of payment. So they are not gambling if you see what I mean.

serin · 17/01/2008 22:00

Oh how relevant!
Our fixed rate mortgage is just about to end and we are also shopping around for deals.

The added problem we have is that we have taken substantial drops in income since we set the last one up and no one except for our original lender will re-mortgage for us.
We are both on temporary contracts, a situation which we hope will soon be resolved!

Our bank is offerring us 5.99% fixed for 5 years with a fee of £695 for setting up.

We are really disappointed as we were hoping that we may go on to interest only but they said they would not be able to do this.

We feel that this is not a good deal but feel trapped into signing! Has anyone got any better ideas?

BigGitDad · 18/01/2008 12:58

Have you tried Nationwide? 5.63% fixed for 5yrs, £499 fee, they are usually quite good and flexible on incomes.
Failing that apply via a broker or an IFA who does not charge a fee and they will be able to get around the income issue.

serin · 19/01/2008 22:24

Thank you BGD,
Have spoken to Nationwide and we are going in to see them next week.
PS, your name doesn't suit you!!!

BigGitDad · 19/01/2008 22:45

Good luck!

Natasha1 · 23/01/2008 18:51

Me again, back again for a bit of further advice. I have found another deal for 4.99% fixed for 5 years or 5.15% fixed for 10 years, fees to set up same whichever fixed rate you take, £700.00.

Now not sure what to do, I have worked out that the 4.99% (even after paying the fees of £700.00) would still save me well over £1000 but now not sure whether to go for the 10 year fixed as to me 5.15% seems a really good deal too. Or should I wait until nearer Nov when current deal ends, as if the interest rate does come down a little bit by then will this make the fixed rates even cheaper? Sorry to keep asking but just want to make sure we take the right/best deal. Thanks for any advice given.

BigGitDad · 23/01/2008 21:28

I think both deals are excellent, would love to know who is offering them. I don't think you will get better deals come November. As I said whatever the Bank of England does it will not have a huge impact on fixed rates as lenders buy the money to lend elsewhere. Presently there is a shortage of money in the market place as a result of the credit crunch and lenders are taking advantage of that to keep rates up rather than lower them.