First Direct cuts fixed rates

Locoblade

....and those C&G rates are only for existing customers Ive just noticed.

lisyloo

Are you going to be changing your rate?

I am thinking of changing to the offset variable from the 10 year 5.99% (the deal before the 6.19%).
This is because I believe rates will fall sharply in 2009.
My mortgage is going down quickly so my risk is upfront, so whilst I realise I have no long term security I am thinking of sacrificing that in my scenario.

I won't get my £299 booking fee back but I will SAVE my £299 arrangement fee becuase it looks like their "offset base rate tracker" has no fees.

My mortgage is due to go through on 22nd November, so I have 3 months.
I am guessing this is plenty of time to change rate as everything else is done.

straddie

Hmmm this is where it gets interesting; we have a FD deal booked and all ready to go at the previous higher rate; I've been suspecting for a while the rate might fall due to the drop in swap rates, and have been monitoring their site daily, but now that it has I'm not sure whether it's best to fork out a new booking fee and get this cheaper rate secured asap or sit tight and wait to see if rates fall again. Would be a right pain in the posterior to fork out a new booking fee now and then have to do it again if rates fall once more.

Life's never straightforward is it!

Locoblade

lisyloo wrote: »

I am thinking of changing to the offset variable from the 10 year 5.99% (the deal before the 6.19%).
This is because I believe rates will fall sharply in 2009.
My mortgage is going down quickly so my risk is upfront, so whilst I realise I have no long term security I am thinking of sacrificing that in my scenario.

I won't get my £299 booking fee back but I will SAVE my £299 arrangement fee becuase it looks like their "offset base rate tracker" has no fees.

My mortgage is due to go through on 22nd November, so I have 3 months.
I am guessing this is plenty of time to change rate as everything else is done.

Hi Lisyloo

Having read various articles on what the BOE rate is most likely to do over the next year or so, with many forecasters now predicting a drop in rates starting early 2009 to stave off recession, maybe down as low as sub 4%, Im thinking exactly the same having previously considered a 5 year fix our best bet.

I can't find a huge amount of specific info on the lifetime tracker on FDs website but am I correct in saying that as well as no fees etc, there's no ERC tie in period either so in a year's time we could jump onto a potentially lower fixed rate for a longer term without penalty? Is there a minimum amount of time you can have a mortgage before you renew again?

The only cloud on my own horizon is that we're currently only around 78% LTV. We do have money in the bank which will build a small single storey extension in the next 3 months reducing our LTV a little (house currently worth ~£215k, may be worth £230k at current rates with the extension therefore giving us ~73% LTV), but obviously if house prices continue to drop then we''re not yet paying off enough capital each month to counteract that, so we might end up in a position where we can't take up the better fixed rate deals anyway due to having a higher LTV.

Decisions decision!

lisyloo

am I correct in saying that as well as no fees etc, there's no ERC tie in period either so in a year's time we could jump onto a potentially lower fixed rate for a longer term without penalty?

Yes I believe so.

Is there a minimum amount of time you can have a mortgage before you renew again?

I don't believe so (subject to your lender getting fed up as I'm sure it costs them money).

straddie

Locoblade wrote: »

The only cloud on my own horizon is that we're currently only around 78% LTV. We do have money in the bank which will build a small single storey extension in the next 3 months reducing our LTV a little (house currently worth ~£215k, may be worth £230k at current rates with the extension therefore giving us ~73% LTV), but obviously if house prices continue to drop then we''re not yet paying off enough capital each month to counteract that, so we might end up in a position where we can't take up the better fixed rate deals anyway due to having a higher LTV.

Decisions decision!

That's the very reason we're going for a fixed rather than a tracker - there's talk today of it taking 8 years for the market to recover - http://www.thisismoney.co.uk/mortgages/house-prices/article.html?in_article_id=450351&in_page_id=57&ct=5 - and at 80% LTV we don't want to take the risk of our LTV climbing preventing us from remortgaging if base rates begin to rise again (and let's not forget the falls aren't guarenteed yet). At least by having the offset deal we can reduce our effective interest rate by boosting our savings to bring the amount of interest we pay down.

Locoblade

Yup it is a concern. There are a couple of things potentially in our favour though, but one big unknown that could adversely affect things.

Firstly we're in the south east which may recover more quickly (as mentioned in that link), also we're about 5 miles below Hindhead near the A3. Hindhead is currently a big bottleneck between Portsmouth and London but there's currently a tunnel being built which should be finished in 2-3 years. Once thats in place, commuting to London from our area will be significantly less stressful so may have a positive impact on house prices.

There's one other unknown for us which is particular to our area. Bordon (which is about a mile from us) is currently mostly MOD land / housing and as such house prices in the town and surrounding villages are slightly lower than most in North East Hants / West Sussex. In a few years time the Army will be moving out and because of the large amount of brownfield site that will become available, Bordon has been shortlisted as one of the 10 potential government Eco-towns. Thats possibly a mixed blessing in many ways though if it does get the eco nod, the town and it's infrastructure will be developed heavily so should be a more attractive place to live than it is now and so house prices may rise. However, that development will include a lot of housing, potentially 3-5000 houses (albeit not in our actual village), and I have no idea how such a large increase in town size and amount of housing will affect the prices in the area.

Still no closer to making a decision on tracker or fixed though!

2latenow

Locoblade wrote: »

....and those C&G rates are only for existing customers Ive just noticed.

Sorry.. I wasn't intending to make them look better or anything... at the time i was sat looking through the stuff the C&G had given me earlier in the day working out my renewal options.

Anyway.. My main point was that C&G seemed to be dropping too... then bbc today reports Abbey dropping some rates today or tomorrow... So maybe there is "hope" after all !

Locoblade

No probs, just thought Id save others from looking if they weren't already with C&G

PeteHi

oh !!!!!!! just spent the best part of 2 months messing about with FD to get the 5 years fix at 6.29%

Changing to 5.95% now, cheers for spotting it. Costing me another £299 reservation fee but will definitely be worth it!!