OK - opinions please?!

Forever_Red

sam1973 wrote: »

What do people think? cheaper 5 year or more expensive 10?

Sam, the main thing with a fixed rate is that you can afford the repayments. Whichever you choose, you have chosen for a reason e.g 5 year fix cos it's cheaper or 10 year fix cos it takes away the uncertainty of what the rates will be in 4 or 5 years.
Too many people complain that they took a fixed rate which is higher than the rates now and they start to pull their hair out and look at the cost involved to pull out early and pay the redemption charges all because there are lower fixed rates about.

It really is up to you and the amount of risk or stability you want.

Good luck with whichever way you go. Enjoy your new home.

Alan

uzubairu

Obviously check the follow-on rates, but I'd go for the 5 year fix and save the difference each month.
Overpay the £80 each month if you can, or save it seperately if you can't.

tcb1973

I've had a play around with an overpayment calculator and seen the huge savings we could make by overpaying by £100 a month (save 7 years and £32,000).

Is there a way of working out how much overapayments would save over a 5 year period? A way of working out how much we could reduce the mortgage by, to try and counter the negative equity?

getmore4less

Mr_E_Man wrote: »

You haven't a clue what you are talking about have you? First you indicate they need disciplining when then never indicated they needed it, then you tell them to look at the follow on rate when the rate is likely to change a lot between now and when it kicks in.

There seems to be a lot of unqualified experts on this site who know f-all!!!

Never mentioned disipline in any post on this thread.

As I said the actual rate is not important it is the rate relative to other deals that is that needs to be considered when choosing the deal to decide which is the best deal.

If you look at the spread of follow on rates they are quite wide, paying a little more now during a promotional period to enure a relativly good rate later may be worth it.

Especialy critical for those that may not be in a position to change lender and only be offered future bad remortgage deals by their current lender(a current trend for high LTV).


Those that took Barclays fixed deals with follow on tracker rates of base +0.19% are glad they paid a little more for their fixes at the time, there were better rates avaialble for the fixed parts but with SVR followons.

getmore4less

tcb1973 wrote: »

I've had a play around with an overpayment calculator and seen the huge savings we could make by overpaying by £100 a month (save 7 years and £32,000).

Is there a way of working out how much overapayments would save over a 5 year period? A way of working out how much we could reduce the mortgage by, to try and counter the negative equity?

Use the whatsthecost calculatoe and look at the detail, it show the interest and capital month by month.

tcb1973

getmoreforless....

regarding the follow on SVR

Leeds BS - 5 yr fixed at 5.25% - switches to 5.44%
Skipton BS - 10yr fixed at 6.44% - switches to 3.60%

However that is presently, that can all chnage drastiaclly can't it in 5/10 years?

CHeers for the advice - mucho appreciato!:o

getmore4less

tcb1973 wrote: »

getmoreforless....

regarding the follow on SVR

Leeds BS - 5 yr fixed at 5.25% - switches to 5.44%
Skipton BS - 10yr fixed at 6.44% - switches to 3.60%

However that is presently, that can all chnage drastiaclly can't it in 5/10 years?

CHeers for the advice - mucho appreciato!:o

(just lost a longer post)

They can change but you would expect the Skipton to be lower at the end of any fixed period. looking at like 4 like the skipton 5y fix is also 6.44% so the differential of the fix is probably big enough to out weight the benifit of the lower follow on in this case.

Looking at your options both have 10% limits on overpayment and fairly heafty penalties on top of that.

I would look at the costs of changing term(reduce) to allow higher payments, some lenders do this for free others charge.