Changing Mortgages

lmcbain

I have recently come to the end of a mortgage deal. My partner and I currently have a mortgage for approximately £57000 but wish to borrow an additional £4/5k for home improvements. I earn approximately £18k but my partner has recently started his own business. We have been advised that we may have to go for a self-certification mortgage but I'm unsure where the best deals in this type of mortgage are at the minute or where to begin. I'm also looking for a capped/fixed mortgage deal given the uncertainty with interest rates at the minute. Any advice most welcome!

Thanks.

lisyloo

given the uncertainty with interest rates at the minute.

Why do you think the outlook is uncertain?
There seems to be a fair degree of consensus amongst economists at the moment (ruling out sudden events like terrorism etc.)

lmcbain

It just seems that mortgage advisers are not willing to give firm advice about whether interest rates are likely to remain the same or are likely to increase. Perhaps I was therefore referring to my own 'uncertainty' following advice received

lisyloo

If by "firm advice" you mean you want somebody to tell you exactly what's going to happen then I'm afraid they can't.

I can't find a link right now, but the consensus amongst economists is that rates will peak at 5.0% or 5.25% (currently 4.75%).
A few say the peak will be 4.75% and a few 5.5%.

The consensus (from reading articles) is that we are quite close to the peak.

Now you have to take those forecasts (which could be wrong if anything changes - like terrorism for example) and match it with your own circumstances.

My own view is that if you can easily afford the top end of current forecasts and beyond then you should get a variable rate.
However if you are going to be stretched if rates go to the top end of the range (or a bit beyond) then get a fix.

It's easier for me to say something like that because you can't sue me if it all goes t*ts up.
The advisers have to be very careful of what they say because of the litigation culture we live in where people want to find someone else to blame and sue when something goes wrong.

In summary, we are fairly close to the peak if things go to plan. Most likely interest rates will peak at somewhere within the range mentioned as long as nothing disastrous happens e.g. 9/11.

Angela

http://www.timesonline.co.uk/newspaper/0,,2770-1216242,00.html

This article may of interest to anyone thinking of changing to a fixed rate.

lisyloo

Thanks Angela, that's exactly what I was looking for.