some advice to back me up, brother in law thinks i'm stupid over fixed rate mortgage

stolt

hi just want to run this past some people on here if i can. I have bought a house for £418,600.00 with a deposit of £275,474.00 so leaves me with a £143,126.00 mortgage.

Now i was going to fix it for 5 years at 4.29% and free valuation and £995.00 arrangment fee.

My wife phoned her family today and told them about our offer being accepted and then her older brother was saying youre mad going for a 5 year fixed rate mortgage, the base rate etc is 0.5% you can pick up really low SVR's. Well I can't but i give up arguing in the end because rather than talking to me he was talking at me. This is a guy that has built up quite a bit of wealth and travels all over the world, but is telling me that rates wont increase for at least 3 years and i'm paying at least 1% over what i should.

I personally thought i had a good deal on the 4.29% fixed. I could afford to go a on SVR and if the rate increased covered it, but most of the SVR's i see are 4% so the additional to have it fixed was in my mind a decent deal.

are there some super low svrs around?

Dan_1976

stolt wrote: »

hi just want to run this past some people on here if i can. I have bought a house for £418,600.00 with a deposit of £275,474.00 so leaves me with a £143,126.00 mortgage.

Now i was going to fix it for 5 years at 4.29% and free valuation and £995.00 arrangment fee.

My wife phoned her family today and told them about our offer being accepted and then her older brother was saying youre mad going for a 5 year fixed rate mortgage, the base rate etc is 0.5% you can pick up really low SVR's. Well I can't but i give up arguing in the end because rather than talking to me he was talking at me. This is a guy that has built up quite a bit of wealth and travels all over the world, but is telling me that rates wont increase for at least 3 years and i'm paying at least 1% over what i should.

I personally thought i had a good deal on the 4.29% fixed. I could afford to go a on SVR and if the rate increased covered it, but most of the SVR's i see are 4% so the additional to have it fixed was in my mind a decent deal.

are there some super low svrs around?

Its all down to your attitude. He may be a risk taker, a little more relaxed. If being on a variable rate seems a little risky for you and you will worry about it go for a fixed. 4.29% over 5 years is very good, trust me!

He is being a little bit of a show off, we can all give flashy advice, but you have to go with what suits you. We cant beat the banks!

stolt

thanks, yes its exactly what i thought at the end of the day the sort of money he has is well out of my league. I thought the rate was superb and jumped at it intially. Put it this way, I can pay £786.00 for a nice detached house or £800 for a 2 bed bungalow with parking restrictions outside which means i have to park my car three roads away.

stolt

hmm just found a first direct mortgage at 2.89% hich would bring my payments down to £675.98!

socrates

stolt wrote: »

hmm just found a first direct mortgage at 2.89% hich would bring my payments down to £675.98!

Perhaps you should speak to a mortgage adviser

As for your brother-in-law tell him when he starts paying your bills - he can start telling you what to do with your mortgage

Ian_Griffiths_Halifax

Stolt, it's all down to what security YOU want. As Dan says, he may be a bit of a risk taker, but if you aren't and you need to be able to budget. Take the Fixed Rate. You'll be glad you did in 18 months to 2 years time.

HangTime

My advice is this - listen to advice, but make sure you go with something YOU are happy with. It's your money and thus your decision.

Do try to keep in mind that he is probably just trying to look out for his sister and maybe just comes across badly because he is concerned that (in his opinion) you are making a mistake. While this can be frustrating when you want people to butt out of your affairs, at least it shows he cares and gives you another perspective on things.

Incidentally he's wrong anyway, the base rate is currently 1%, not 0.5% (although it's entirely possible that it could drop to that level soon). I'd be concerned about taking advice from someone who got something as simple and fundamental as that wrong!

Smi1er

Your fix sounds expensive to me.

Haven't Nationwide said there SVR will be a max of 2% over base?

Bottom line is have a look and do something you're happy with.

Joe_Bloggs

What does the Chancellor of the Exchequer have up his sleeve in the forthcoming budget ? When is it scheduled to take place ?
Perhaps there is more reason for anxiety and speculation as to the future, when key announcements are made on one day.

J_B.

Woby_Tide

Smi1er wrote: »

Your fix sounds expensive to me.

Haven't Nationwide said there SVR will be a max of 2% over base?

Bottom line is have a look and do something you're happy with.

The Nationwide SVR you can't obtain for a new mortgage?

How many 5 years fixes are under 4.3% currently? Hardly many.

Agree with going for what he is happy with though

dunstonh

Fix at 4.29% seems very good value. You cant get SVRs for new business and trackers have high tracking rates which may still look cheap now but if rates start to rise in 12-18 months time, you will regret not being on a fix.

Security vs risk. Its a bit like endowment vs repayment all over again. Which is you?