Fixed rate mortgage deals

jabbertheminx

Help!!!

We are coming the end end of our fixed rate deal and are unsure what to do for the best.
We have time on our side as our current deal doesn't end until the end of March. I have spoken to the advisor who arranged our original mortgage and we have been left with a choice of two deals:
1. Stay with our existing lender who is offering a 5yr fixed deal at 4.99% at a fee of £599
OR
2. Move to another lender who is offering a 10yr deal, also fixed at 4.99% with an arrangement fee of £995 but with free legal/survey costs.

We are tempted to go for the 10yr deal, mainly because we know our monthly payments are going to remain the same, But we're hesitant as we don't know what the rates are going to be like in the future.

Can anyone offer any advice on this subject. We would be very grateful!:beer:

Nice_guy

Hello and welcome! (only my second post!)

I am also in a similar dilema!

The 10 year fixed deal you have been quoted seems quite competitive from what I have seen! Who is it with?

I have been thinking that as interest rates are at an all time low, would it not be wise to fix now for a long term? You'll miss out on any further rate cuts (not sure how much more cuts there would be) but over a 10 year span surely 4.99% has got to work out below average for interest rates.

But the disadvantage as I see it is that are locked in for a ten year period. If your circumstances changed and you wanted to overpay by more than what your allowed to or even to pay off all together, the penalties etc would no doubt be crippling!

Do you know what the terms of the new deal are?

jabbertheminx

Thanks for your reply & warm welcome!

The 10 yr deal is with Cheltenham & Gloucester and as I mentioned the arrangement fee is £995 and there is also a booking fee (:eek:) of £99. We checked it is a full 10 year term, as some similar deals were only fixed for 7yrs but you were locked into the mortgage for 10yrs, with the remainder as a standard variable rate. I'm not sure of the penalties, but unless we win the lottery (which we would have to start playing first!) we aren't really in a position to pay off any more any sooner. As our advisor pointed out regarding the arrangement fees, if we went for the 5yr deal we would have to pay £599 and then at the end of that, if we went for another fixed deal we would have to pay more fees again, so in the grand scheme it seems as broad as its long.
We're due to go back in a couple of weeks to confirm our decision and get the ball rolling - if I find out any more details I will update you.
Good luck!

Nice_guy

From what I have been reading, anything under 5% for a fixed rate for 10 years is good. I read somewhere that Llyods TSB are doing a rate under 5% for a 10 year fix. Might be worth checking them out to see how it stacks up against C&G, LTV could have been around 60% but don't quote me on that! Llyods T&C's could be better along with the product fee, worth a nose about.

At least by fixing your rate for 10 years you won't have to worry or concern yourself with what’s going on with interest rates at all, long term fixes are all about the peace of mind it brings, this coupled with interest rates being at an all time low makes fixing your mortgage for a long term look attractive.

It's all swings and roundabouts, I’m sure you'll benefit from your fix term deal at one point throughout the ten year span. Interest rates when high appear to stay at that level longer than when they are low.

No more sleepless nights for you!

jabbertheminx

Thanks for that, I will certainly look into the Lloyds deal, nothing to lose! Most of the deals we looked at are max 60% LTV, but thats not really an issue for us. It's just a bit scary being tied in for 10yrs, but the security of fixed payments is a bonus.:T

philswannie

I dont know whether its the best rate about, but Britannia BS have a 10 year fixed rate on their website of 4.89% LTV 60%, it has a fee of £549.

Here's the link http://www.britannia.co.uk/home/mortgage/fixed/10_year/index.html

Good luck !

Astrolondon

Hi all

I too was considering a 10 year fix rate with C&G (which would be a similar deal to Lloyds as they are part of the same company). However, my bank's SVR is currently 5.49% so am happy to stay on it until the end of this year. I am hoping that more competitive long term fixed rate deals get released this year especially as there seems to be an expectation that the base rate will soon hit 0.5%.

Well that's my strategy (thought up this weekend). After being a lurker for a couple of years, this is the thread that made me sign up and publish my first post!

It will be interesting to come back to this in 8 months time to see whether this was the right decision or not. Your comments are extremely welcome! Naturally, I will be keeping my eye on when the base rates start to go up and this will prompt me to start looking for remortgaging deals again.

Good luck everyone with their own decision making strategies.
Astro

Astrolondon

One more thing!

I don't feel so scared being locked into a good 10 year fixed deal as I understand that if I were to move I could port the mortgage over to the new property. Then, all I would have to do is get a new mortgage for the remaining balance (if any). Hope this helps!

Astro
(No posts for 2 years and then 2 in the space of 5 minutes!).

jabbertheminx wrote: »

Thanks for that, I will certainly look into the Lloyds deal, nothing to lose! Most of the deals we looked at are max 60% LTV, but thats not really an issue for us. It's just a bit scary being tied in for 10yrs, but the security of fixed payments is a bonus.:T

jabbertheminx

Thanks for the tip-off re:Britannia 10 yr fixed. Sadly they don't deal with brokers so we would have to sort it ourselves, which isn't a biggie if it saves a few quid. However, I have had an online quotation (thanks for the link!) and although they are offering a full 10 yr fixed rate of 4.89% what they don't mention until you read it through fully, is that on top of the £549 arrangement fee, they also charge £200 for survey and £450 for legals. Naughty!

dimbo61

Please check if you are allowed to overpay on any 10 year fixed rate deals and any limits on overpayments.
Then if things get better with income you have the chance to overpay
Also consider offset mortgages if you have savings or you are self employed
Make sure the mortgage is portable !

herbiesjp

Please remember that whilst having the portability option is a good thing, there are no guarantees that you will be able to port your mortgage when the time comes.

Porting the mortgage is treated like a brand new mortgage application and fully underwritten again. And if either your circumstances have changed and/or the lending criteria of the lender have changed, you may find you will not be able to port