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  • FIRST POST
    • clairebeth
    • By clairebeth 18th Apr 17, 12:07 PM
    • 108Posts
    • 29Thanks
    clairebeth
    5yr vs 10yr fix?
    • #1
    • 18th Apr 17, 12:07 PM
    5yr vs 10yr fix? 18th Apr 17 at 12:07 PM
    Hello,

    Just looking for your general thoughts and advice on this. I know the final answer rests with us and what suits our financial situation, but interested in hearing some opinions!

    We are going to ditch our YBS 3.69% fix which ends 31/07/19. We initially started thinking about this due to the savings that switching to a cheaper rate would bring, despite the £3200 ERC from our current fix. We were then very attracted to the First Direct 10 year fix @2.64% with no fees. Our ultimate aim is to pay our mortgage off in ten years, and we liked the idea of knowing that we could lock in a low rate with unlimited overpayments in that time. We would break even on 'ditching our fix' on this rate, but felt it would provide us with security during the Brexit/Trump/ children's primary school years (we have a 4 year old and a 5 month old).

    However, particularly since the release of the Atom mortgages last week, (which I believe we would meet the lending criteria for @1.34% on 5 year fix), I wonder if we should try for the shorter fix, less interest (20% overpayment allowed), and get ahead over the next five years and refix in 2022?

    Our first mortgage in 2009 was at a rate of 6.04%, so anyway we look at this, we know we're in a pretty fortunate place, but I don't want to make a decision we regret! Is it possible that rates will be up at 6 or 7% again in 2022 if we take the five year fix?

    Any advice appreciated! Thanks!
Page 2
    • clairebeth
    • By clairebeth 28th Apr 17, 4:34 PM
    • 108 Posts
    • 29 Thanks
    clairebeth
    Is there a reason you want to go with Coventry instead of fee free First Direct?
    • sevenhills
    • By sevenhills 28th Apr 17, 6:09 PM
    • 478 Posts
    • 181 Thanks
    sevenhills
    Is there a reason you want to go with Coventry instead of fee free First Direct?
    Originally posted by clairebeth
    I have a preference for building societies, I have a hunch they are more on the side of the person, Coventrys fee is I believe £8
    • getmore4less
    • By getmore4less 28th Apr 17, 7:15 PM
    • 29,745 Posts
    • 17,788 Thanks
    getmore4less
    I am hoping to get a 10 year fixed mortgage, next month, from the Coventry.
    A couple of years before rates nose dived, no one predicted it, and no one can predict when rates will be 5%+
    I am a right to buy, £35k, over 12 years.
    Originally posted by sevenhills
    I have a preference for building societies, I have a hunch they are more on the side of the person, Coventrys fee is I believe £8
    Originally posted by sevenhills

    end of life mortgage aiming for 10y with a 10y fix go for the one that is cheapest overall, you won't be changing again.
    • Dandytf
    • By Dandytf 29th Apr 17, 1:48 PM
    • 761 Posts
    • 299 Thanks
    Dandytf
    That's true, although I was a first time buyer in 2009 and the reduced rates weren't actually passed onto the public for ages, 6.04 :-( ! However, you are completely right, no one can predict the future, but it's reasonable to try and pay less in the meantime to be in a better position in the future!
    Originally posted by clairebeth
    I moved from prevous flat 2009. Svr 2.25%
    When base rate dropped .05%-my move cost me 3yrs@6%

    Thankfuly I'm enjoying my recent flat past few years, as you advise I would never have guessed rates staying -1 for a few years.

    Looking foward to taking a new nat wide mtg when my existing 5yr fix@5% fnishes Aug.

    3 months to apply is fast approaching.

    The 5/10 year fix choice is mind bogling at times.
    Both terms offer affordable payments.

    Cant honestly think that rates will be this low in 5 years -though I was wrong the last time as well.

    Think i'll go 10 year fix-and hope rates dont' fly sky high!
    sc dmp 2012 13k

    Jan 2017 7380 paid. 50% ish...
    • clairebeth
    • By clairebeth 29th Apr 17, 2:01 PM
    • 108 Posts
    • 29 Thanks
    clairebeth
    I agree, I don't think five year rate is right for us. I think we are going to wait until I'm closer to finishing maternity leave and EITHER, fix on a very low rate for two years, save £3000 on our current rate, get ahead and have 60% ltv on two years time, or fix for ten years. We will perhaps know more in a couple of months.
    • Dandytf
    • By Dandytf 29th Apr 17, 2:26 PM
    • 761 Posts
    • 299 Thanks
    Dandytf
    I agree, I don't think five year rate is right for us. I think we are going to wait until I'm closer to finishing maternity leave and EITHER, fix on a very low rate for two years, save £3000 on our current rate, get ahead and have 60% ltv on two years time, or fix for ten years. We will perhaps know more in a couple of months.
    Originally posted by clairebeth
    You are very knoweldgable with your options.

    I 'cant be bothered' switching every 2 years-though it could make financial sense.

    Think play it safe is simple choice for me.

    Even the trackers don't look as reasonable as they were past 5 yrs (dependent of course if rates rise)

    Good luck makng your choice
    sc dmp 2012 13k

    Jan 2017 7380 paid. 50% ish...
    • clairebeth
    • By clairebeth 29th Apr 17, 2:50 PM
    • 108 Posts
    • 29 Thanks
    clairebeth
    Thank you! You too!

    I'm not that knowledgeable, hence why I ask for advice here! We wouldn't normally go for a two year fix, being 'play it safers' too. But we are currently three years into a five year fix, and the two year fix is the option that makes ditching that fix most attractive.
    • clairebeth
    • By clairebeth 11th Jul 17, 7:40 AM
    • 108 Posts
    • 29 Thanks
    clairebeth
    Got a text from First Direct to say our 2.64% over 10 years with no fee and unlimited overpayments has been approved today! I feel this is the right thing for us, and feel secure, which is important! I will try to hold on to this feeling if I see the rates plummeting again!
    • BigBus2017
    • By BigBus2017 4th Sep 17, 8:38 PM
    • 7 Posts
    • 0 Thanks
    BigBus2017
    Hello and congrats on ur mortgage offer from First Direct.

    I wanted to find out FD mortgage process. I have started a remortgage move from halifax to First Direct (its been 18 days)
    This is my first remortgage move.

    Time line so far

    18/08/17- Called First Direct for a remortgage, call handler took all my income, outgoing, work info and property info. And was told iv passed the affordability and credit search and a mortgage advisor would contact me to book an appointment for a advised mortgage interview. In the mean time i needed to email via FD online portol -3 months pay slips, 3 months bank statements and my last 2 years p60. All sent over same day. (Call lasted 1hour)

    21/08/17- Mortgage advisor calls to book an appointment for the 23/08/17.

    23/08/17- Mortgage advisor calls and goes through my income and outgoings in more detail and asks few details on my bank statements transactions etc
    Online valuation is satisfactory
    At the end of the call they advise me I would get a call back in the next few hours for a decision
    (Call lasted 1h25m)

    An 1h later Im told iv been accepted and since my recommended mortgage offer is a fee saver I can book/save the rate immediately. They also wanted my solicitors details since I declined their own recommended solicitors.
    Im then told i should receive a declaration letter to sign and return and in the meantime I should send a copy of my passport via FD webcam for quicker process.

    The next day I receive a letter for a copy of my signature for their record.

    25/08/17- I received mortgage advice report

    26/08/17- I received in a black envelope with the words everything's in motion which contained the declaration and agreement form for me to sign and return.

    30/08/17 - I received a letter outlining customer instructions.

    04/09/17- received a call from FD asking me they needed to call my work place to speak to me or I call from my work telephone and speak to them for work verification.
    I managed to call them from my work telephone and they verified it on their systems.

    I found that a bit strange after all i have provided all my the documents they have asked for. Any they did tell me they have everything now and there will be one more final checks; Im guessing the underwriters is what they meant.

    Is this the same process you had to go through and what was ur process like?

    Any information will be appreciated

    Jay
    • clairebeth
    • By clairebeth 4th Sep 17, 9:53 PM
    • 108 Posts
    • 29 Thanks
    clairebeth
    Hi, yes, that's pretty much identical to ours. Except the phoning from work thing, but we work for the NHS and the city council, so maybe they get people to do that for smaller workplaces or something?

    After first contacting them in th middle of May, we locked in the deal on the 4th of June. Valuation 21st of June, I think.Then mortgage was officially approved on the 10th of July. However, we were away until the 28th so didn't send the solicitor paperwork back until the first week in August, which then got lost in the post (!), so then had to do it again and get someone to sign it etc, so that was sent back two weeks ago (to their appointed solicitor), so HOPEFULLY it will all go through this month! It sounds like it has taken a long time, but really, any delay has not been the fault of first direct or the solicitor. I had to faff around getting a letter from work about maternity leave, we needed a physical valuation, and then we went on holiday and then the stuff got lost in the post! But we are very happy with their service. Love that when you phone them someone answers the phone, it's not a machine! We remain happy with the deal that we have locked in.
    • BigBus2017
    • By BigBus2017 6th Sep 17, 6:04 PM
    • 7 Posts
    • 0 Thanks
    BigBus2017
    Thanks for sharing your experience, Iv just call the First Direct mortgage team to get an update and was told the application has been sent to the underwriters today and I should get a response in 48h by the end of Friday. If everything is ok I should get a text message or if they need more information they will call me.
    Two sleepless nights now
    Btw iv applied for the fee saver 5 year fix @1.84.
    • clairebeth
    • By clairebeth 6th Sep 17, 6:14 PM
    • 108 Posts
    • 29 Thanks
    clairebeth
    Yay! Yep, we got a text confirming approval and then signed the paperwork from solicitors. Good luck! I think it's a great deal.
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