Money website says BUY NOW!

Thrugelmir

chucky wrote: »

regardless if it was the lower volume of transactions it is still a large amount of transactions however period in time you present it

NR had a target of £5 billion this year and looks likely to fall short of £4 billion.

The £9 billion target for 2010 was set in February of this year.

NR seems to be losing out to its competitors. Barclays lent £17 billion in the first six months of 2009 against a full year target of £11 billion.

So swings and roundabouts. As NR's basic SVR isnt a great incentive for high equity borrowers to stay loyal.

michaels

chucknorris wrote: »

I never went for these 2-3 year deals with headline catching low rates. I ALWAYS went for a decent tracker which you know is good value over time. Brokers always used to try and steer me towards these deals saying don't worry just remortgage when the discount ends. They never had an answer though when I replied that I had modelled it on a spreadsheet and found trackers were much cheaper due to the fees (broker's fees, mortgage arrangement fees, valuation fees and the solicitor's fees).

Brokers have a vested interest in these products as they will earn another fee when the discount period ends.

I check the cheapest cost over the deal term making sure I look at broker and lender direct options, my friendly broker rebates half his fee which I also factor in to the calculation. Of course it is still possible to be caught out by events, unanticipated changes in svr margins, unexpected activation of rate floors, falls in equity to below the threshold needed to get the best rate etc etc but it is very like the high interest savings accounts, the initial rate is a loss leader designed to bring in the punters with the profit being made when the initial rate is cut (for savings) or the special rate expires (mortgages). For those willing to make the effort to ditch and switch the deal is almost always better than just sticking with one provider.

Thrugelmir wrote: »

And pay yet more product fees?

£600 on a 200k mortgage over 2 years adds all of 0.15% pa to the rate making it equivalent to 2.94%, still probably cheaper than the best long term deal but it is easy enough to do the maths factoring in all the costs to work out whether the fees pay for themselves during the special rate period.

One risk as I already mentioned is whether equity levels might have fallen by remortgage time preventing follow on deals - an issue on which I suspect a lot of borrowers have come unstuck...or rather stuck on an uncompetitive svr.

Thrugelmir

michaels wrote: »

£600 on a 200k mortgage over 2 years adds all of 0.15% pa to the rate making it equivalent to 2.94%, still probably cheaper than the best long term deal but it is easy enough to do the maths factoring in all the costs to work out whether the fees pay for themselves during the special rate period.

And for the majority of mortgage holders who don't borrow £200k the actual % cost of product fees is far higher. Particularly once mortgages fall beneath a £100k capital balance outstanding. The lenders are specially targeting these offers to attract a certain borrower.

One unreported fact of the FSA mortgage review is that major lenders plan to raise mortgage product fees higher in the future. In order to tie customers in for longer, to deter "rate tarts" and mortgage churning.

michaels

Thrugelmir wrote: »

One unreported fact of the FSA mortgage review is that major lenders plan to raise mortgage product fees higher in the future. In order to tie customers in for longer, to deter "rate tarts" and mortgage churning.

Agree it doesn't make sense for everyone but the rise of the fees and tie in to me demonstrates that they are losing money on those saavy enough to play them at their own game. If everyone wa willing to take the time to regularly review their financial products and make sure they were getting the best deals then the poor deals would quickly disappear form the market...

Thrugelmir

michaels wrote: »

Agree it doesn't make sense for everyone but the rise of the fees and tie in to me demonstrates that they are losing money on those saavy enough to play them at their own game

I would be very surprised if the banks are losing money on new business. You might be savvy enough to find the right product that suits your circumstances at the time. But like a casino they'll take your money in the end and make a profit.

Radiantsoul

sabretoothtigger wrote: »

Wont take 10 years to get back to 5% base rates. It didnt take that long to drop from 5% and theres no good reason why it would be slower to rise back up.

It might take quite a while as there are three sources of stimulus to be removed;
1. QE
2. Government deficits
3. Low interest rates.
I think they will be dealt with in that order, and I can't see that happening quickly. the bank tends to move slowly wit 50 base point moves. So it might take a year to get back up even when the process starts.

Thrugelmir

Radiantsoul wrote: »

It might take quite a while as there are three sources of stimulus to be removed;
1. QE
2. Government deficits
3. Low interest rates.
I think they will be dealt with in that order, and I can't see that happening quickly. the bank tends to move slowly wit 50 base point moves. So it might take a year to get back up even when the process starts.

2nd quarter in 2010 expect interest rates to move up even if its only .25%. Seems to be a general view in the City now that rates will move upwards.

fc123

chucknorris wrote: »

I never went for these 2-3 year deals with headline catching low rates. I ALWAYS went for a decent tracker which you know is good value over time. Brokers always used to try and steer me towards these deals saying don't worry just remortgage when the discount ends. They never had an answer though when I replied that I had modelled it on a spreadsheet and found trackers were much cheaper due to the fees (borker's fees, mortgage arrangement fees, valuation fees and the solicitor's fees).

Brokers have a vested interest in these products as they will earn another fee when the discount period ends.

I would love to say we have a boring old tracker because we had spreadsheets etc too...but it was more by accident.

In fact, it was Martins MSE that woke me up to swapping around mortgages etc and utilities...and..thank goodness, I never had the time and got around to swaping them. OMG....I did change the shop utilities to Energy for Business...what a disaster..they went bust and the administrator came after us for loads of cash as we had been underquoted on usage (so they looked cheap)...so, with utmost respect to Martin and MSE, some stuff I ignore now.
But most of the stuff on the site is fantastic.:o

The mortgage? Luck for us we are on lifetime tracker 0.49% above base and no penalties to overpay or redemption penalties..but luck....not even Martin had a crystal ball 2 years ago..so...I don't judge anything at all.

Running_Horse

MSE_Martin wrote: »

Now is a great time to buy that property, says lovemoney.com

Most people buy property when they need somewhere to live, rather than to make money???

nollag2006

Thrugelmir wrote: »

2nd quarter in 2010 expect interest rates to move up even if its only .25%. Seems to be a general view in the City now that rates will move upwards.

Really ?? Most of the discussion that I've seen suggests that rates won't begin to rise until Q4 2010

I appreciate that house prices are rising and that the economy is now coming out of recession, but I still think that it will be much later in 2010 before interest rates can start to rise.