FTB mortgage tips

scroggin

My gf and I are FTBers, with an offer accepted on a lovely property. We're fortunate enought to be putting down a 20% depoisit.

We're tempted to fix for five years and our broker has found the best deal (as of two weeks ago) at 5.49%. Like the certainty of the longer period, and don't see the point in fixing for shorter as we could probably handle the interest rate risk over a 2-3 year period.

However, reading in various places I'm aware that some lenders offer better rates if you go direct. How can I be sure that I am being offered the best rate available? What good deals are there out there at the moment?

andrewmp

Darlington Building Society offer a 5 year fix at 4.99% for your LTV

http://www.darlington.co.uk/M213-5-year-fixed-rate-mortgage-146A1.html

Obviously compare arrangement fees with what you've been quoted.

Dom3663

The rate after the 5 year fixed with Darlington is VERY high...you would almost be forced to take out another term mortgage as your payments could change dramatically.

andrewmp

Dom3663 wrote: »

The rate after the 5 year fixed with Darlington is VERY high...you would almost be forced to take out another term mortgage as your payments could change dramatically.

It's SVR, like most lenders.

Dom3663

SVR's ...

Nationwide: 3.99%
Natwest: 4%
C&G: 2.5%
Alliance and Leicester: 4.24%
RBS: 4%
ING: 3.5%
Co-Operative: 4.24%

...and so on.

Darlington: 5.95% .... and by charging 1% of the loan for product fee its (in most cases) going to be in excess of £1000...

Is a nice low fixed rate though lol

Hmm..

andrewmp

Depends on the amount of the loan, for me it would have been £60k.

Current SVR's mean nothing, nobody knows where any lender SVRs will be in 5 years.

getmore4less

andrewmp wrote: »

Depends on the amount of the loan, for me it would have been £60k.

Current SVR's mean nothing, nobody knows where any lender SVRs will be in 5 years.

You cannot ignore the rate.

It is the relative rate that is important, if they are the highest now they are likely to be the highest in the future.

andrewmp

getmore4less wrote: »

You cannot ignore the rate.

It is the relative rate that is important, if they are the highest now they are likely to be the highest in the future.

Maybe he could move after 5 years and get a new deal elsewhere.

scroggin

Exactly, surely we just re-mortgage in five years time, to whatever the most appropriate deal we can get at that time.

Yes, the product fee on the Darlington product is unattractive, we are looking at c.£250k mortgage.

Any other good deals around? How can we be certain the deal our broker is suggesting is the best available?

andrewmp

scroggin wrote: »

Exactly, surely we just re-mortgage in five years time, to whatever the most appropriate deal we can get at that time.

Yes, the product fee on the Darlington product is unattractive, we are looking at c.£250k mortgage.

Any other good deals around? How can we be certain the deal our broker is suggesting is the best available?

You can't be, unless you get a good broker, or maybe one who charges for his advice. They'll get no commision off some direct only deals so some of them might not let you know about them.

Chelsea Building Society do a decent deal if you can stretch to 75% LTV

http://www.thechelsea.co.uk/mortgages/nb_product_053.html

They also have a 10 year one

http://www.thechelsea.co.uk/mortgages/nb_product_050.html

getmore4less

andrewmp wrote: »

Maybe he could move after 5 years and get a new deal elsewhere.

Big Maybe,
Job loss
Increase in fees
house price drop
new LTV criteria

Loads of reasons the low follow on rate would have been the better option for the sake of a little saving now.

For small loans fees are a big risk.

Assumng it will be OK I can just move my loan is naive.