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Original poster

Help! I've messed up my remortgage

36 replies

gentlesea · 30/05/2023 21:41

So my current fix ends tomorrow and I have a new one for a 2 year fix in place with my current lender to start in June. But all this recent news about inflation not budging is alarming me and I'd like to switch to a 5 year fix, again by doing a product transfer with my current lender. They're telling me it'll take a few days to cancel the rate and only then can I apply for the new one. I'm worried that during this time the rate for the 5 year fix will go up. Also I'll probably be on the SVR for a little while. Has anyone done this? Switched products during a rate switch? How long did it take for it to go through?

Also, I arranged the initial product transfer via a broker. While they don't charge (they take a commission from the bank), will I be charged by them if I cancel and try to do the rate switch myself online as apparently this is quicker?

Or should I just carry on with the 2 year fix now that's it's just about to start and hope for the best in 2 years? I am worried about rates going up in the days it'll take to sort this!

OP posts:
Twiglets1 · 31/05/2023 05:45

But to answer your question, I would just accept the 2 year fix.

ThankmelaterOkay · 31/05/2023 06:00

Truestorypeeps · 30/05/2023 23:09

In terms of the UK interest rate forecast for the next 5 years, the BoE itself gave forecasts as far as 2026 in its May report.

The bank saw interest rates at 4.4% (lower than the current rate) in the second quarter of 2023, where the rate was projected to stay in Q2 2024, before falling down to 3.8% in Q2 2025. In 2026, the bank saw the rate at 3.6%.

In its UK long-term interest rate forecast as of 12 May, ING saw policy rates staying at 4.5% throughout 2023, until the second quarter of 2024, when it predicted rates to be cut to 4%, followed by cuts to 3.5% and 3% in the following quarters. In 2025, the bank saw UK interest rates at 2.5%.

Echoing this sentiment, Scotiabank’s forecast as of 28 April showed interest rates at 4.25% in 2023, and at 3.25% in 2024.

...2 year fixed is where I'd stick.

Think these predictions are already out of date due to the recent inflation data.

Obviously it could swing back with better than expected data next month, but I don’t think the BoE are going to cut rates in 2023, and it’s almost nailed that 4.75% is coming next month.

KievLoverTwo · 31/05/2023 06:40

gentlesea · 30/05/2023 22:29

Although 5 years have been cheaper than 2/3 years so does that mean they're all around the same level now?

Show quote history

They have got extremely close.

peacelemon · 31/05/2023 06:42

Stick with the 2 year

peacelemon · 31/05/2023 06:44

Did your broker get you a better deal than if you'd just phoned your mortgage provider?

Morechocmorechoc · 31/05/2023 07:04

Rates just went up, you change now you'll get a worse rate. Also they should be lower in 2 year, I wouldn't fix for 5 now

BanditsOnTheHorizon · 31/05/2023 07:24

I've just signed up for a 2 yr deal as my FA said interest rates will level out in the second part of the year and will potentially go down slightly next year.

ArdeteiMasazxu · 31/05/2023 07:38

gentlesea · 30/05/2023 22:17

I've not actually rearranged it yet @ArdeteiMasazxu! I'm just wondering now if it's worth going to the effort to do so and lose the rate I have secured already. The difference between the 2 and 5 year is £35 a month I think so you're right it's not a huge difference.

And to gentle sea It's 4.7 @NewNovemberfor 2 years. The 5 year would be 4.3.

The point I was making is that it will make even less difference than this.

The reason that the 5 year rate is around 4.3% is because when it was set, the experts who are setting the rate for the lender thought that rates would be likely to be around 4% or less in 2026-2028 so if they locked you in for 5 years at 4.3% they would make a profit

If those predictions are right, then after 2 years you'll be able to get a further 3 year fix at 3.9% and by the end of the 5 years you will be quids in

If economic events right now in 2023 start to make the 4.3% rate look like a less safe bet for them then yes they might put the 5 year rate up, but that will be based on current predictions for a totally unpredictable future.

I think you should stick with the rate you have booked.

KievLoverTwo · 31/05/2023 07:38

Truestorypeeps · 30/05/2023 23:09

In terms of the UK interest rate forecast for the next 5 years, the BoE itself gave forecasts as far as 2026 in its May report.

The bank saw interest rates at 4.4% (lower than the current rate) in the second quarter of 2023, where the rate was projected to stay in Q2 2024, before falling down to 3.8% in Q2 2025. In 2026, the bank saw the rate at 3.6%.

In its UK long-term interest rate forecast as of 12 May, ING saw policy rates staying at 4.5% throughout 2023, until the second quarter of 2024, when it predicted rates to be cut to 4%, followed by cuts to 3.5% and 3% in the following quarters. In 2025, the bank saw UK interest rates at 2.5%.

Echoing this sentiment, Scotiabank’s forecast as of 28 April showed interest rates at 4.25% in 2023, and at 3.25% in 2024.

...2 year fixed is where I'd stick.

Are ING known to be particularly good at interest rate predictions?

Thinkbiglittleone · 31/05/2023 07:46

I would stick with your 2 year mortgage and then ensure you are looking early on enough before your mortgage cones up again.

If your broker has done a good job he will have secured the best rate at that time, i imagine you will now be securing a 5 year at a higher rate, so I would stick and review in 18 months times.

Original poster
gentlesea · 31/05/2023 09:10

I have checked and the rate is still there but it's also the beginning of the month soon when banks seem to change their rates. Mmm.

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