Another first time buyer, sorry. Help re Mortgages

bobbarley

Evening everyone!

My wife and I are looking into our first home together after renting for several years. We're looking at properties in Manchester up to £100k, with a £10k deposit, so 90% LTV.

We've found a few mortgages which we consider to be the best so far.

Name: Natwest 2 year tracker first time buyer exclusive
Term: 2 years
Length: 35 tears
Monthly cost: £436.58
Rate: 4.69% (following base rate)
Other: £0 product fee, can overpay

Name: Nationwide 2 Year tracker
Term: 2 years
Length: 35 years
Monthly cost: £437
Rate: 4.63% (following base rate)
Other: £896 fees, free legal service, can overpay

Can anyone recommend something similar? RBS do a mortgage identical to Natwest. We're looking for something to get us onto the ladder. 2 years down the line we'll no doubt re-mortgage, possibly fixing it. So to start low monthly cost is the main thing.

Thank you :beer:

_Andy_

Hi - trackers are all well and good but are you going to still find the payments affordable if/when the base rate increases?

bobbarley

Yeah, we're pretty comfortable if the base rate goes up 1-1.5% in the next two years. It's not being forecast to go any higher before then.

mclaren32

bobbarley wrote: »

Evening everyone!

My wife and I are looking into our first home together after renting for several years. We're looking at properties in Manchester up to £100k, with a £10k deposit, so 90% LTV.

We've found a few mortgages which we consider to be the best so far.

Name: Natwest 2 year tracker first time buyer exclusive
Term: 2 years
Length: 35 tears
Monthly cost: £436.58
Rate: 4.69% (following base rate)
Other: £0 product fee, can overpay

Name: Nationwide 2 Year tracker
Term: 2 years
Length: 35 years
Monthly cost: £437
Rate: 4.63% (following base rate)
Other: £896 fees, free legal service, can overpay

Can anyone recommend something similar? RBS do a mortgage identical to Natwest. We're looking for something to get us onto the ladder. 2 years down the line we'll no doubt re-mortgage, possibly fixing it. So to start low monthly cost is the main thing.

Thank you :beer:

If you go with Natwest then you will have the option to track and fix, this would enable you to go onto a fixed rate after 3 months from drawdown on the mortgage. The rates they have available for people who do this are quite attractive, particularly for people with 10% equity, how does a 4.29% fixed for 2 years for a £199 arrangement fee sound?

When I first saw this I couldnt believe it but with the track and switch the rates you can move on to are part of the loyalty range. If you visit a branch and ask for a print out of the existing customer rates you will be able to confirm this.

Here are the options...

http://www.natwest.com/personal/mortgages/g3/fixed-rate.ashx?tab=3

bobbarley

Wow, thanks! That looks too good to be true. I'll definitely be making an appointment with Natwest :j

CloudCuckooLand

You might want to review your expectations of future interest rates.

The Bank of England Inflation Report for February 2010 says the Base Rate is predicted as follows;

Per cent
.........2010........................2011........................2012............2013

Q1...Q2....Q3....Q4....Q1...Q2....Q3....Q4....Q1....Q2....Q3....Q4....Q1

0.5__0.5__0.6__1.0__1.3__1.7__2.1__2.5__2.8__3.1__3.3__3.5__3.6

http://www.bankofengland.co.uk/publications/inflationreport/ir10feb5.pdf page 43, table 1

In the first quarter of 2012, the expectation of the BoE is for 2.8%.

And they are playing down future inflation, that some think is being overlooked, so that % could end up being an optimistic forecast.

And of course your tracker is 4% above Base rate, so would be approaching 7%...

bobbarley

Just one of those things I guess. If we track we'll still feel it, and if we fix we'll feel it when we come off it.

I like the idea of the Natwest tracker, then move onto fixed for 2 years.

Pretty sure we're going to try to get that