Mortgage/re-mortgage

[UnionGlassCloth]

What's everyone doing? I'm going round in circles.

I'm just inside my 6 month window on my existing deal and have a five year fix offer at 5.74% (£300 a month extra) and lots of other options from my existing lender incl trackers etc..

I think I'm leaning towards the surety that the fix offers but a fairly clued up acquaintance is not fixing, reckons that rates will drop in late 2023 and I'll be stuck paying more for nothing.

We are in the process of buying a new house. We have gone for a 5 year fix but our mortgage was accepted sept so we have a 3.79% rate. We just wanted the stability of knowing what our outgoings were going to be for a while.
can’t compare to current mortgage as we are currently on an interest only so we needed to swap to a repayment anyway. Husband is a mortgage advisor!
I read something recently on a property website that was predicting rates may level back off to 4-5% but possibly not go back to the super low rates we’ve enjoyed for some time

Thanks RM. I need to make a decision! My expiring deal was at 3%, set long before the really low rates. I think I'll probably fix tomorrow. I can manage £300 but much more and I'd struggle.

Bank of England will follow America and hike interest rates. It's a gamble. They won't come down quickly though. They never do

The difference between interest rate deals on offer and BOE base rate has never been so great though. The gilt markets/swap rates haven't recovered since Kwasi's disastrous mini budget yet. Because of the huge hike in product rates and the massive buffer that banks built in in the panic of last month I don't necessarily think that a BOE hike tomorrow = increase in fixed rates on offer.

If I hadn't have experienced Truss/Kwasi I'd be watching and waiting for a couple of months - but I have hence I'm wary!

Rates are dropping already vs last month. Hold your nerve.

I would be tempted to wait. I think rates will come down. Having said that they will go up tomorrow so the one look like good advice. All depends on your attitude to risk and a fix offers certainty.

*this won't look like good advice. (MN needs an edit button)

I think I’m going to go with a two year fix for a bit of surety and the penalties aren’t as harsh. If rates do improve dramatically the exit fee (1.25% in the first year as opposed to 5% on the five year fix) will be manageable and I can swap to something with a better rate.

If we’re in a worse place in two years I’ll need to re-think where I live.

How much equity do you have? If the house price falls that some are predicting do happen and your house drops by 10-15%, will that make remortgaging in 2 years difficult? If you don’t have a great LTV I’d probably be cautious and go 5 years to avoid having to find a new mortgage in a recession on house worth less than it is today (but I’m very risk averse and in no way qualified!).

Better to fix for 5 years. Any drop in rate will not be substantial enough to be worth moving out of your house in 2 years?!

Except in 2008/09. They came down pretty bloody quickly then .

Following

They did, and that is how I, who took what looked like a great 5 year fix at 5% in early 2008, found myself paying considerably more than I should have been for the next five years. But then how would I have felt if I hadn't fixed and rates had gone up instead of down? Very hard to know.

The big movements are always hard to predict, no-one has a crystal ball.

The central banks can’t do what they did in 2008. Inflation is here to stay and is the difference between then and now. The days of cheap money is over.

www.ft.com/content/1d2af214-caf6-4326-916d-b597577186c8

12ft.io/proxy?q=https%3A%2F%2Fwww.ft.com%2Fcontent%2Ff3bb0f96-1816-4481-8318-4f7583326a4a

Our 5-year fix is coming to an end, but we are going for a 2-year variable offer (currently 3.7%). The BoE rate would have to go up A LOT before the variable hits the 5.5+% fixed rates on offer. And even if rates do rise, we are able at the moment to front-load it with overpayments.

When is your fix up?

We're atm going for a tracker which is 1% above base rate so currently 4%. 2 year fix with no exit fees.

Hoping things will be better by April when ours is up but very unlikely

I’m glad to see others going for trackers at the mo. We were offered to fix at close to 6% but have gone with a 2 year tracker with no penalty to leave. If things look disastrous we can fix but it seems unlikely rates will meet 6% for a sustained period of time…

I never expected I would go for a tracker but with base rates expected to reach 4.75% at the peak (of course this can change) if you can get a low interest rate tracker you shouldn't pay more than 6% with hopefully a lot of months at less than 6%

Our deal comes to an end in June and we are planning on a tracker. Fixed deals are not looking very good at the moment.

We've just done a fixed. Just over 5.5% for 2 years but I want the peace of mind that we can pay it.

It's a bloody nightmare tbf.

What happens if you reserve the 5 year fix, and in 5 months time, either take it up, of get a better 5 year fix if rates have dropped. It would cost you a second reservation fee, but might be worth it?

This is exactly what we have done. We have locked in a 3 year fox at 3.68% starting 1st February but keeping an eye on rates and will ditch if they drop before February.

Interesting, I don't have that option (NatWest), once you've chosen your deal that is it once the 14 day cooling off period has lapsed, so you're stuck with ERCs.

We are with Platform. The paperwork they sent had a line in saying we had 120 days to sign and return it. I spoke to them too about whether signing the paperwork binds us to the 3 yr fix. They said it binds them but it isn't binding us until the switch kicks in on the 1st Feb. They confirmed that if the rates drop before then, we can always call them to change the product to the lower rate.

We are only switching with our current lender. We aren't remortgaging to a different one. Maybe that's the difference?