Mortgage query

[Pammela]

Hi, we have a 0.8% mortgage that ends on January 1st 2024.

my husband is stressing quite a bit about the rate changes as we will obviously notice it a lot. When could we lock in a new deal at current rates (which aren’t great!)? He’s worried they’ll be about 6% by the end of the year.

We have v good ltv and term is about 28 years currently.

Any advice appreciated.

thanks!

It’s 6 months in advance usually, so July 1st.

They are aboue 6% now. Your current provider should contact you but it's usually 6 months, so from Monday.

I had a look and there’s still some for 4.5%. So we’d be hoping to lock that in if possible

They’re only going to go up in the short term so best to lock one in as soon as possible, I think.

If you have found 4.5% I'd be on the phone on Monday if I were you. Mine expires 31/12 and I haven't seen anything that good since last week.

If you have found 4.5% you need to pounce on that now...I will be surprised if it still exists by Monday!

Have the new mortgage rules, about locking rates 6 months in advance, been implemented by the banks? When we were looking 1.5 years ago most of the banks I approached only wanted to talk to you 90 days before mortgage start 😕.

Ive not seen or tried yet- I’m hoping you can!

https://www.moneysavingexpert.com/mortgages/getting-ready-remortgage/#:~:text=You%20can%20usually%20lock%20in,a%20cheaper%20deal%20locked%20in.

this is a couple of days old and seems to suggest you still can? I think we’ll definitely try regardless!

Just go on your existing lender website and see what rates they are offering for a remortgage? That will give you some idea of what you are looking at. It will all depend on what period you are looking to fix for. 2/3 year fixes are generally going to have higher rates than a 5 year fix. You need to decide what is more important to you? You could fix at a lower rate for 5 years, giving you certainty on payment for the next 5 years, there is obviously a chance that rates will reduce in the next 2-3 years so you would possibly be paying more (equally they may not). You could fix at a higher rate for 2 years, on the expectation of hopefully getting a better rate in 2 years time (although the rates could remain the same or increase).

No one knows what is going to happen in reality. If your financial situation means you would be sensitive to further rate increases then fix for 5 years and pay the potential cost premium of certainty.

Thanks for the feedback. So, after my husband panicking, I double checked our current mortgage deal and it turns out it’s not out until December 2024.. so hoping rates will have dropped a bit before then and we’re going to save and overpay until then too!

🙈🙈

I don't know id be tempted to remortgage early if you really did get offered 4.5%! I will be thrilled if we could get 4.5 in 2025.

Well we’d then have to factor in the early repayment and the loss of the interest on savings for the bulk payments. And the 4.5 is for 2 years- we still have 18 months left at 0.9..so it seems a bit bonkers to change for that.

With gas and electricity prices starting to drop there’s a hope that some of the inflation will continue to slow. And obviously as peoples mortgage repayments increase, there’s less spending. We’ll still be cutting back just so that we can overpay as much as possible as that will count more towards the capital when we’re on 0.9.

This is all quite cyclical, so I’m confident that it will plateau at some point. It will never go back to 1%, but I reckon around 4% will become the new normal.

Yes no fair enough, I'm just amazed you found 4.5%, everything I have seen has been over 5% for a little while now, our LTV isn't 60% though.