Lenders and brokers say fix your mortgage

Thrugelmir

Ian_Griffiths_Halifax wrote: »

It's been a long time since I arranged a 10 year Fixed Rate, and 25 year Fixed Rates with 10 year penalty periods weren't available then.

If somebody WERE looking at a long term Fixed and wanted 10 years+, then I would consider a longer one with only a 10 year tie in.

So which way are the products in the mortgage market going?

As a bystander ( I have a fixed life tracker), I was struck by the fees charged for the headline products when I last changed my mortgage. Although the headline % interest rate is low the actual interest rate after including the fees paid was in reality much higher.

lukiesgirl

Hi all

I was advised to fix in January last year and I am now stuck with a 5.9% rate for 5 years! I asked Halifax how much I would need to pay to change to a tracker and I was told it would cost £4000 and then a tracker fee on top of £1199.:mad: I guess I am stuck with it but it would be nice to reduce the £600 repayment every month!

My OH does surveys and completed one recently for the Halifax. It asked him what he thought about the option of fixed rate customers being given the option to change fee free so maybe there is light at the end of the tunnel!

Just earned £120 for surveys since november so maybe I will pay it off the Mortgage:rolleyes:

andrewmp

Ian_Griffiths_Halifax wrote: »

It's been a long time since I arranged a 10 year Fixed Rate, and 25 year Fixed Rates with 10 year penalty periods weren't available then.

If somebody WERE looking at a long term Fixed and wanted 10 years+, then I would consider a longer one with only a 10 year tie in.

My product is a 25 year fix with no redemption penalty after 10 years. I wouldn't have tied in for 25 years if the redemption policy existed after 10 years. I saw it as a 10 year fix with the option of staying on the fix if the market wasn't in my favour for whatever reason in 10 years time.

Ian_Griffiths_Halifax

Thrugelmir wrote: »

So which way are the products in the mortgage market going?

As a bystander ( I have a fixed life tracker), I was struck by the fees charged for the headline products when I last changed my mortgage. Although the headline % interest rate is low the actual interest rate after including the fees paid was in reality much higher.

That may be the APR rate you were looking at, which includes any arrangement fees.

I would say there is generally a recommendation for people to Fix their rates. Not many people believe that rates will stay this low (though the base rate is likely to go lower) for any longer than 18 months.

Of course, as always, this will depend on personal circumstances and if you have a .25% above Base Rate Tracker Mortgage, and you have no problems in funding the mortgage even if rates hit 7% as a Base Rate, then it could be worth while staying on the deal you're on.

Fixed Rates are really there to offer security on knowing what your outgoings are going to be, not necessarily to 'win' compared to variable rates.

Most people would never consider taking a Car Loan out if they knew the payments could go up from £200 to £300 a month, even if they may go down to £100, so why do people take a variable rate mortgage which could be 10 or 20 times bigger than their car loan?

Ian_Griffiths_Halifax

andrewmp wrote: »

My product is a 25 year fix with no redemption penalty after 10 years. I wouldn't have tied in for 25 years if the redemption policy existed after 10 years. I saw it as a 10 year fix with the option of staying on the fix if the market wasn't in my favour for whatever reason in 10 years time.

That's the best of both worlds then. The security of the Fix if you want it but with the ability to get out if you don't.

Imagine though, a couple on a 25 year Fixed Rate, with penalties for the first 10 years. After 7 years they want to separate. There could be big problems with redemption penalties or one buying the other out of the mortgage. A 10 year Fixed Rate is ok for some, but not for the majority IMO.

andrewmp

Ian_Griffiths_Halifax wrote: »

That's the best of both worlds then. The security of the Fix if you want it but with the ability to get out if you don't.

Imagine though, a couple on a 25 year Fixed Rate, with penalties for the first 10 years. After 7 years they want to separate. There could be big problems with redemption penalties or one buying the other out of the mortgage. A 10 year Fixed Rate is ok for some, but not for the majority IMO.

Yeah, I realise what you say, I'm single, with falling house prices and an obviously rising LTV I could not afford to end up on SVR. All signs were pointing to rises anyway at the time I took it out (back in July). The way I look at it 6% isn't a bad rate, not over the next (up to) 25 years anyway, it's obviously not great right now.

I'm £100 worse off now than if I had took a tracker offered when I took my mortgage out (BR+1.5%). I'm willing to "lose" that knowing I won't be £200 worse off if the BOE base rate hit circa 8.5%