EvilC wrote: ↑Fri Sep 30, 2022 5:27 pm
3.49% is amazing in the current market.
Second this. I'd be getting on that asap. It won't be around for long.
If you look at it as 13k more spent over 5 years
How much will it cost to "save" that charge and then risk say 5%?
5 years would give you good protection , fingers crossed in 5 years rates have leveled off even if it's at 5% or whatever at least if they have leveled and stabilised people can prep
The only fear of a 5 year deal now is if the rates come right back down again and we are “stuck” at 3.49% instead of around 2% etc.
But then I guess if the savings to be made in a few years time with better rates are good enough then we pay another early exit fee (£2k ish) and take a new product and the amount saved will cover the £2k fee in a year or so
kenthammer1984 wrote: ↑Fri Sep 30, 2022 6:42 pm
The only fear of a 5 year deal now is if the rates come right back down again and we are “stuck” at 3.49% instead of around 2% etc.
But then I guess if the savings to be made in a few years time with better rates are good enough then we pay another early exit fee (£2k ish) and take a new product and the amount saved will cover the £2k fee in a year or so
Nobody has a crystal ball. All I can say is that 3.49% is a steal right now. And if you can’t afford it if rates rise or remain at their current c. 5%, I’d take this now and be delighted.
kenthammer1984 wrote: ↑Fri Sep 30, 2022 6:42 pm
The only fear of a 5 year deal now is if the rates come right back down again and we are “stuck” at 3.49% instead of around 2% etc.
But then I guess if the savings to be made in a few years time with better rates are good enough then we pay another early exit fee (£2k ish) and take a new product and the amount saved will cover the £2k fee in a year or so
I doubt very much they will drop so dramatically, especially when inflation is high and the bank of England only know one way to deal with it (interest rates, even tho it's inflation high because of energy costs and food costs etc)
My 10 year fix from 2019 was 2.79 so it's not that much higher than that
Bank of England ATM is what 2.25.. I doubt we will see below 2% for a decade.
I fixed in July for 10 years at 2.24%. there were lower rates for shorter terms but it was still a relatively low rate in the scheme of things and knowing the payment amount is set for that time just gives piece of mind.
I need to ring back and check how payments will work, as we have only just made a monthly payment and can’t afford to find another payment before the next payday (if they expect to move it across instantly and take payment etc - I don’t know how it works)
I see new fixed rate mortgages are about 6% even though interest rates are 2.25%. Does this mean when my fixed rate deal finishes in Sumner of 2024 I will be paying 10% if interest rates are at 6%?
Are there any mortgage people here who can help answer that. 10% would make things very tight.
bonzosbeard wrote: ↑Mon Oct 03, 2022 4:43 pm
I see new fixed rate mortgages are about 6% even though interest rates are 2.25%. Does this mean when my fixed rate deal finishes in Sumner of 2024 I will be paying 10% if interest rates are at 6%?
Are there any mortgage people here who can help answer that. 10% would make things very tight.
No.
Interest rates are based on the forward curve - which is a fancy way of saying what the market expects rates to be over that period. On top of that, your lender needs to cover costs, put a risk premium on and make a profit.
I don’t know what the right add-on over forecast base rate is, chelmsfordhammer might be better placed to tell you. 1.5% seems reasonable. What I believe is the ten year forward curve is just over 4%, so 6% looks like a reasonable guess. There is obviously a long time between now and then, so it is hard to predict anything in such a volatile world.
Interest rates are based on the forward curve - which is a fancy way of saying what the market expects rates to be over that period. On top of that, your lender needs to cover costs, put a risk premium on and make a profit.
I don’t know what the right add-on over forecast base rate is, chelmsfordhammer might be better placed to tell you. 1.5% seems reasonable. What I believe is the ten year forward curve is just over 4%, so 6% looks like a reasonable guess. There is obviously a long time between now and then, so it is hard to predict anything in such a volatile world.
Spot on with the first paragraph.
Only fault with the second paragraph is that I have no idea! However, 1-1.5% above base rate is about right, but like you say it is a volatile market at the moment so hard to call all round.
On the plus side, banks still have to compete with eachother and mortgages will continue to be a lucrative market for them so they will try to undercut eachother where possible (with the risk/odds still in their favour of course!)
Best bet is to just compare online and try and workout if fixing at a higher rate now pays off compered to a theoretical rate of 5/6/7% and assess from there.
mumbles87 wrote: ↑Mon Oct 03, 2022 7:55 pm
First time (looking at nationwide) that I've seen a 10 year deal cheaper than a 5 year
4.5% for 10 year
There's a few on moneysupermarket et al. I think I saw 4.09% as the lowest currently (assuming LTV is less than 60% which is usually the cut off for the best rates/terms).
Still a jump of 1.85% since I last checked before in June ish.
chelmsfordhammer91 wrote: ↑Mon Oct 03, 2022 8:00 pm
There's a few on moneysupermarket et al. I think I saw 4.09% as the lowest currently (assuming LTV is less than 60% which is usually the cut off for the best rates/terms).
Still a jump of 1.85% since I last checked before in June ish.
mumbles87 wrote: ↑Mon Oct 03, 2022 8:18 pm
its a jump from when I checked last week!
I would happily take 10 years at 4.5% but I phoned nationwide and was told that as my 5 year finishes July 2024 earliest I can redo one is March 2023. That may be the worse time to get one.
Difficult to judge really.
Thanks though Evil C & Chelmsford. Even though you cannot fully predict you've certainly given me a bit of peace of mind.
Pint up from £3.25 to £3.60 in the pub the other night. That’s 10% or so? As a long term drinker, the increments are usually 10p so that’s a hefty increase.
