Is 15 yrs too long for a fixed rate?

CTID_2

I am looking to remortagage with NR (my current lender) and am looking at a fixed rate. They have a 7, 10 and 15 yr all at 4.99. They give a a little help with fees and I think it may be a good product for me as I sail close (ish) to the wind each month and any significant change in the SVR would be a killer. I know thinking is that the SVR has peaked, but I thought a 15 yr would ride all troughs & peaks, and at the end of the dat 4.99 is a good rate. But is it too long? Any seers have any advice or comment on this product?



Mike

Rafter

The government are actively trying to encourage this sort of long term fixed rate mortgage.

In France and other european states, it is very unusual to get a variable mortgage and Gordon Brown thinks that as a result their economies are more stable and recessions less deep.

4.99% does sound like a good rate over 15 years. You might be able to better it by changing every few years but you will then expose yourself to risk that rates rise or you cannot fix at such a good price.

There is not right or wrong answer. If 15 years is right for you (and the exit penalty isn't too onerous if you decide to move or your circumstances change) then go for it.

Good luck.

R.

dougk_2

I looked at the NR 4.99 rate after reading your post earlier. The ERC at 5% seemed quite fair and it seemed the scheme was flexible (so you could move etc) from the quick look I had. Certainly fixing it for 15 years means you know exactly what you need to pay and could do some easy long term planning.

Its something it has got me thinking about now

MarkyMarkD

4.99% is not a bad long-term rate, and as the previous post states, 5% isn't a bad ERC (although it's still £5k on a £100k mortgage - ouch)!

According to the website, 4.99% is the 15 year rate with a £695 fee and no help with fees. Are you certain about what you are being offered?

Or maybe I just don't understand NR's website which seems to give naff all info about the product terms unless you go through all the KFI palaver.

CTID_2

I agree, the website gives sod all info initially. I'm borrowing more, so I have an Admin fee of £250, Additional borrowing fee £249 and Arrangement Fee £695. Total Cost £1194 but I get Clawback help £750. So cost is £444.

The first two costs are list as Mortgage Review - .Admin Fee £250. Does that mean I have actually paid for the mortgage reveiw they gave me (I phoned them as an exisiting customer)? If I just ask for a change and not go through this dept (if possible) would I still have this to pay?

MarkyMarkD

Cor - and some people wonder why NR is so profitable?

Nearly £1200 in fees?

The £250 fee is for switching products - so you haven't incurred it yet.

dougieb4

"Nearly £1200 in fees?"

Yes, but don't forget in return for a 3 year commitment £750 of this is refunded after completion. A bit of a no brainer on a 15 year fix!

Also the Early Repayment Charge on this deal is actually 5% for the first five years, 4% for the following five and 3% for the final five years. Not 5% for the entire term.