Fixed in current climate ?

Shortone_3

Hi All,

We have just come off a fixed rate mortgage with the Nottingham we were paying £500 a month but have dropped to their SVR which is costing us £578.

We have always had fixed rate mortgages but wonder if its worth holding out for interest rate drops in the next few months ?

I know its a big questions but can anyone advice on a good fixed rate option without us having to pay a lot of fees. The Nottingham have offered us two options

7.29% until 2011 no fee which will cost us £570 a month
6.79% until 2011 + £795 fee which will cost us £559 a month

We have a family of two youngsters and would like to save as much on our monthly repayments, should we take the chance of going with a tracker ?

Any help will be gratefully received.

Heyman_2

The impression I have is that fee-free fixes are a little hard to come by at the moment, and if you do want one then it tends to be a high rate.

HSBC are doing a 5.98% fix for 5 years up to 90% LTV with a £995 fee on it, which is pretty good. You can also take advantage of their Remortgage deal meaning that the valuation and legal fees are free, so all you'd have to pay would be the fee.

If you have a good LTV then you should go and speak to a broker really, as you will have more options and they will likely be able to get something that fits your requirements.

*Edit* - forgot to mention, if you are considering a tracker then HSBC were doing an entirely fee-free tracker at 5.99% if you are remortgaging. Might be worth considering!

Toughluck

what is your loan to value? If under 75% lending those rates are high and you should go elsewhere.

mcowan77

is the hsbc mortgage, where they pay all legal fees and valuation available in scotland?

Shortone_3

what is your loan to value? If under 75% lending those rates are high and you should go elsewhere.

I think we have a low LTV ?
Our house is worth £185000 and we have a mortgage of £63300 is that correct ?

space_rider

You have a better LTV than me and I was given 6.69 fixed for 2 or 5 years for a fee of £499 or a 3 year fix with a fee of £100 by my lender Abbey. I know they have better rates for new customers.

I`ve taken their offer of lifetime tracker 1.4 above base rate for a fee of £999 and I can come out of it at anytime without a penalty. I`m restricted to only a few lenders as tax credits make up some of my incomings. I was going to go for the stability of the fixed but thought this tracker gives me the opportunity to fix if necessary.

Locoblade

Shortone wrote: »

I think we have a low LTV ?
Our house is worth £185000 and we have a mortgage of £63300 is that correct ?

Yep your LTV is about 35% which is great (loads of equity).

Assuming your credit rating is OK and you earn enough to cover a £63k mortgage, that LTV should give you the pick of most lenders deals, certainly far better rates than 6.79%. I'd think that with similar fees you could get a fixed rate under 6%., but do some research on the FSA mortgage seach engine (http://www.fsa.gov.uk/tables/bespoke/Mortgages) to give you an idea what's available, then if you want additional advice get in contact with a whole of market mortgage advisor.

As to whether to fix or go on a tracker, as always its down to how much risk you want to take and how much extra per month you could afford IF the base rates went up again. From what Ive read, it does seem that drops are more likely than a rise over the next year or so, in an attempt to stave off recession, but Im by no means an expert myself, Im only going on stuff Ive read on places like thisismoney.co.uk etc so please don't take this as anything more than a personal opinion of someone who's only recently taken an interest in such things

Shortone_3

Thanks for the assistance guys, I will do some shopping around and as suggested go for a whole of market mortgage advisor.