Bank Woes Ensure Interest Rate Will Stay Low

payless

Teterow wrote: »

So I am coming off my 5.73% fixed rate at the end of July...shall I sit on the SVR of 2.49% at least until the end of 2009? I am certain I am in negative equity and would have trouble getting a decent mortgage. Thoughts please?

It doesn't sound as though you'll have any option BUT to sit on the SVR...

Your SVR is lower than most ... but if your really to fix and feel due to LTV ior circumstances you can't find a new lender- remember to ask your current lender if they have any options.... on thing to watch now is lenders saying your reversion SVR ( ie once new fixed rate ends) will not be as good as your current SVR ( Nationwide for example) also applies many currently on a Term tracker .

There is a way to stay on current deal and hedge against rate rises for 2 years... although of course comes at a cost - but for many on sub 3% variables - its cheaper than taking a normal fix.

beecher

I'm not sure you can say that the bank woes ensure that interest rates will stay low - hell of a gamble for some to bet on it.

Teterow

payless, my mortgage is with Bristol&West. Could you explain the hedging please?

payless

Teterow wrote: »

payless, my mortgage is with Bristol&West. Could you explain the hedging please?

Hedging allows you to stay on your current rate ( if thats you you want / only option)and pay an amount ( whether this be an isnurance premium or to purchase financial instruments or margin deposit on a spreadbet ) upfront that then covers increases in bank rates/ your mortgage payments for a period of time.

Its not a cheap fix option for those with options open to them- BUT for those with a low tracker Or those unable to secure a fixed rate deal its an option
- so won't suit everyone, but whilst complex it is a way of getting the security of a fixed without actually fixing the mortgage yourself.

Teterow

Hi there,
just to give you an update.
I rang my current lender and if my mortgage came to an end on 30/06 (mine ends 31/07) they would offer me the SVR and a 3yr fix (5.09%) as well as 2 5-yr fix rates ( 5.49% and 5.69%) irrespective of my LTV.
I am currently the sole bread winner, but plan to have a baby next summer. In light of our plans, which option would you go for?

Teterow

My current lender rang me today and we discussed fixed rate mortages.
I have not committed to anything, but they will send me an offer for a 3yr fix at 5.09% with a £499 fee. This offer is valid for 30 days. Given that they gave me the same rates about a month ago, I am not sure whether they are in a hurry to hike rates.
It is still tempting to sit on the SVR for a few months though.
S

Teterow

Hi there,

just a quick update.
Bristol & West have now raised their 3yr and 5yrs fixed deals by 0.4% to 5.49% and 5.89%.

I still have an option to go on the 3yr fix at 5.09%, which I have locked in a month ago.
The SVR is still 2.99%. I have come off a 2 yrs fix at 5.73% so the 5yr fix is more expansive.

I am not sure what to do, cause I dont expect the BoE Base rate going up before the end of the year.

punknzippy

hi , i am in the same position where my discounted trackers just finished and now my payments have gone up by £50 a month , by looking at the deals around i think i shall stick with the standerd rate for now as fixing it will cost at least another £1600 + a year and from what i have read and been told and read between the lines on then the interset rate shouldnt move much for another 10 to 12 months and if it does go up a bit it would still be not as much as the £1600 it would cost me to fix it

Teterow

I do agree, although in general I do prefer to know what I am paying.
I do get the feeling though that Bristol&West are a quite sympathetic lender in general. Their SVR is one of the lowest in the market, I think.

Maybe other B&W customers could comment on this? Mortgage advisers, should I stay on the SVR for a while or fix for 3yrs at 5.09%?