What to do? Media say get new fixed rates?

russppt

Hi
I am confused with the media urging you to get new fixed rate deals.

I have approx. 18 months to run on my fixed rate at 5.9% (we took out 5 years) witht he abbey, paying approx £840 per month interest only on 165k, making capital payments when I have any spare cash.

Should I try and get a new deal now on fixed rate or wait till the 18 months is up?

Would appreciate your comments and opinions.

Cheers

Russell

ps. Just been told I am expecting twins! delighted but will then have 3 children under 4!

Hippychick

I would check what your early repayment charge is and crunch the figures. If you have to repay 3% or so of your balance that would be nearly 5k. If you can save that by switching over the next 18 months then it is worth it.

I have a feeling it won't be though and you'd be better witing until your 18 months is up.

Congratulations on the twins though

Gorgeous_George

Unless your lender will allow you to grab a new fixed rate early, you will need to wait until the fixed rate ends.

Of more concern should be your LTV. If it isn't below 80% you will find it difficult to change mortgage products and you could be stuck on your lender's SVR. This may not be so bad as, if rate stay low, the SVR could be lower than your current fix.

GG

dimbo61

Carry on with your existing fixed deal and try over the next few months to clear the credit cards before the twins arrive and you need to find your next mortgage deal.
Good Luck to you and your family

Peelerfart

dimbo61 wrote: »

Carry on with your existing fixed deal and try over the next few months to clear the credit cards before the twins arrive and you need to find your next mortgage deal.
Good Luck to you and your family

Have to agree with Mr Dimbo ,clear your cards first.

PF

russppt

Thanks for all the feedback and opinions.
Will clear cards first.
Cheers again.
Russell

maveli

russppt wrote: »

Hi
I am confused with the media urging you to get new fixed rate deals.


Russell

ps. Just been told I am expecting twins! delighted but will then have 3 children under 4!

It is the mortgage brokers urging thru media for obvious reasons.

payless

Base rates could move back up quickly (esp if inflation picks up) but whether that will be reflected in a similiar rise in fixed rates is not as clear , as surely its already partly priced in - although of course the margins between Base - Libor- Average new Mortgage rate are now higher than generally in the past .. we need these margins to tighten to see return of competitive rates ( so whilst I agree with Maveli comments to a degree , its not the case for all adisers- ie for many of my clients - mainly those that could afford it if rates went up, rather than needing security / on a good gvariable already - we are discussing staying on existing term trackers/svr than jumping to fixed

Rafter

Newspapers are telling people to fix for a few reasons.

1. They are being lobbied by mortgage brokers who aren't doing much business with a slow housing market and a lot of customers sticking on SVR.

2. Base rates probably will rise back to their 4-6% long term average which will make mortgages very expensive for people on what currently feel like very low mortgage rates.

In your case, you just need to hope that fixed rates haven't risen too high by the time you need to renew.

You could possibly save about 1-1.5% on your current rate by getting a best buy fixed right now. But you would probably have to pay abbey a 3-6% exit fee wiping out any gains you might make.

You just run the risk that rates in 18 months time are much higher.

If you want some payment certainty while raising a young family, you could see if Abbey will allow you to transfer to a 10 year fixed rate or something? But it really depends whether they will waive your exit fee.

Good luck

R.

TEDDYRUKSPIN

Rafter is correct..............

Media are not advisors! Wonder if we can put a nice complaint through the FSA due to a nice newpaper putting advice on their articles? LOL.

happybroker

I've yet to look at a deal that I could see any sense in coming out of their current deal, paying the charges and picking up a new deal...not to say that it hasn't happened. Some of the subprime lenders have waived erc's but otherwise it's a no brainer.

I would be surprised if the media is listening to mortgage brokers though, personally I can't see that putting in my suitability letter that "you are happy to pay your early repayment charge and financially disadvantage yourself because "The Sun" told you so" would carry much credibility with the FSA.

I seem to remember an article on here from a fairly senior MSE that said people should look into it though!!