10 Year Fixed

itsakidsworld

In my previous posting on this subject I said I would be looking for a ten year fix. Well I have done tons of looking and found a five year fix which after reading posts, I feel maybe a better option?

The rate is 4.4% for five years with free valuation. Sounds a good deal. Tied in for this period then reverts to 0.75% above BOE base. Is this the best around or is there better?

105k

I got a five year fix at 4.39% about nine months ago. At the time I considered a ten year fix at 4.79% (no plans to move house) but decided that a lot could happen in ten years.

Time seems to be passing really quickly on my low rate though so maybe ten years would have been OK.

Still, I live in hope of rates dropping to 2 or 3% in four years time:)

homer_j_3

dwsjarcmcd wrote:

If you are moving house and your product is portable, you can use it up to the level of your current loan

I think you should be clear in saying that you will only be able to port the mortgage if you can satisfy the lenders criteria fully on the next property to use the facility. What if there is a loss/severe drop in income or their credit rating gets shot to pieces - this could seriously affect the situation. A lender will not lend money again if they feel it is not responsible lending regardless of a portibility clause.

There is no guarantees that when the option may need to be exercised that the OP will meet that criteria and could potentially be stuck with an expensive Early Red Charge or be unable to move. This is a consideration that needs to be looked at and yes I accept the same could happen with a 2, 3 or 5 year deal but all the same you need to be sure of the risk you are taking and the length of time/cost of getting out of a deal if you need to.

10 years is a very long time to take a mortgage, albeit at a competetive rate as personal circumstances are often affected by those things we cannot forsee or plan. Just look back at the last 10 years and ask yourself how things have changed in your life. Did you forsee the changes?

dwsjarcmcd

homer_j wrote:

I think you should be clear in saying that you will only be able to port the mortgage if you can satisfy the lenders criteria fully on the next property to use the facility. What if there is a loss/severe drop in income or their credit rating gets shot to pieces - this could seriously affect the situation. A lender will not lend money again if they feel it is not responsible lending regardless of a portibility clause.

Don't agree with you. Should your senario come to pass do you not think this would massively impact on your ability to move lenders?

There is no guarantees that when the option may need to be exercised that the OP will meet that criteria and could potentially be stuck with an expensive Early Red Charge or be unable to move. This is a consideration that needs to be looked at and yes I accept the same could happen with a 2, 3 or 5 year deal but all the same you need to be sure of the risk you are taking and the length of time/cost of getting out of a deal if you need to.

Yes it is but in reality would they not have a much better chance with a lender with whom they had a payment history?

10 years is a very long time to take a mortgage, albeit at a competetive rate as personal circumstances are often affected by those things we cannot forsee or plan. Just look back at the last 10 years and ask yourself how things have changed in your life. Did you forsee the changes?

Sorry but most mortgages are taken over much longer than 10 years, its the product that is changed. Yes my life has changed dramatically over the last 10 years but I still have my mortgage

boy_3

itsakidsworld wrote:

The rate is 4.4% for five years with free valuation. Sounds a good deal. Tied in for this period then reverts to 0.75% above BOE base. Is this the best around or is there better?

Could you post the lender/broker name here if possible? I am looking for a 3/5 years fixed rate as well. Have only found around 4.7 till now.

itsakidsworld

Yes sure,

The company offering 4.4% fixed for five years was Darlington Building Society.

I know nothing about the company but have begun making enquiries.

IAKW

homer_j_3

dwsjarcmcd wrote:

Sorry but most mortgages are taken over much longer than 10 years, its the product that is changed. Yes my life has changed dramatically over the last 10 years but I still have my mortgage

You implied in your original post that portability was a right with a mortgage if it had this as a feature. Whether you meant to imply this or not, this is how it was perceived.

I stand by my comments in saying that it is not a right - it is a discretion of the lender to allow the borrower to exercise this.

If the situation was to prevail that the reason for not allowing this feature to be exercised was down to not meeting their criteria then you have to accept that you either pay an ERC to buy yourself out of the deal or you have to lump it and stay where you are.

If the lending criteria was failed due to a change in circumstance of the borrower, it does not necessarily mean the end of the world for moving to another lender who will be more flexible to whatever these changes may be.

If the lending criteria was failed due to the goal posts being moved by the lender then you are stuffed. These are all considerations that need to be considered.

10 year mortgages are excellent if they meet the requirements of the individual but the individual cannot make this decision based on assumptions that portability will save the day should they need to move the mortgage in the ERC period which in my opinion is effectivey what you were implying.

If you were not implying this then please could you rephrase this so I can understand what point you are trying to make?

boy_3

itsakidsworld wrote:

Yes sure,

The company offering 4.4% fixed for five years was Darlington Building Society.

I know nothing about the company but have begun making enquiries.

IAKW

Are you sure you are not talking about TRACKER rate for 5 years as below? Fixed one is 4.99% for 3 years. Did you go through a broker?

Tracker Mortgage 2 A1
4.40% (The Bank of England Base Rate -0.10%) until 31 July 2011, changing to…
5.50% (The Bank of England Base Rate + 1%) for the rest of the mortgage.
The overall cost for comparison is 5.3% APR

meanmachine_2

itsakidsworld wrote:

Yes sure,

The company offering 4.4% fixed for five years was Darlington Building Society.

I know nothing about the company but have begun making enquiries.

IAKW

You won't get a five year fix for 4.4%, sorry.

Not unless it's got a horrible overhang beyond the fixed period.

itsakidsworld

Boy & Meanmachine,

Fair comments from you both and will look at the details.

I did a mortgage search on a website and that is what came up, which looked great. Sorry if the information I gave is not correct.