First Direct Pull Low Fixed Rate - Does This Mean Rate Rise Is Coming

chuckalicious_2

I have had my eye on the 5 year fixed 3.89% mortgage (max 65% LTV) that First Direct has been offering for a few months.

However, I went onto their website this morning to find that this product is no longer offered. The next best deal is a 75% LTV at 4.29%!

Is this normal for lenders to pull deals or is it a warning that they see something coming?

I can see that HSBC is still offering a 65% LTV 5 year fixed at 3.99%, but I'm wondering if that will go soon too.

Thoughts?

MBM

Halifax have told us that they will be increasing fixed rates at the end of the week. My personal view is that we have seen the lowest fixed rates.

getmore4less

THese 65% LTV were good deal and relatively much lower risk.

Perhapos they have a loaded up decent mortgage book so they no longer need any more of the good bets and are looking at the next rung up whre they can charge alot more for the same money.

chuckalicious_2

Funnily enough on my way to work, after making this post, the front news story of the Metro was that rates were being pulled, and they quoted the FD one.

Thankfully I called them last week to book said rate and they couldn't get an advisor to call until this coming Sunday, but noted that I'd be given that rate even if they pull it between me calling and the advisor calling back.

Hopefully they stick to that promise!

silverfoxuk

I'm still weighing up sticking on Nationwide BMR of BOEBR + 2% (so currently 2.5%) or fixing for 5 years at HSBC 3.94%.

Although I think interest rates will only rise a little this year (what with Gov spending cuts, redundancies being announced in public sector and unemployment going up), it's possible that in the last 3 years of the fix so 2013 - 2016, 3.94% will be good value?

What do you think?

Rov

I'd been hoping to get the 5y fix from FD or HSBC, unfortunately im not in a position to get it for a few months, looks like I've missed the boat now! They're only going one way from this point...

chuckalicious_2

The golden question isn't it?

I am in a similar situation whereby my 5.19% fixed expires in October 2011 with a 3% ERC, however, I am about to come into some money in May which will take a huge chunk off of the mortgage.

So my dilema is:

A) Take ERC hit in May and get a much better rate, ie the 3.89% for 5 years,

or

wait until October to save £6500 (the ERC) and risk getting a higher rate.

Overall the monthly payments work out at about about £20 per month difference, if I assume rates hit about 4.2-4.3% in October for a 5 year fixed. But, between May and October I'd be saving £460 a month compared to my current payments by switching to the lower rate sooner.

I know it'd be more sensible to not take the ERC hit, but it's the worry of what the rates might be like nearer the time....

chuckalicious_2

Rov wrote: »

I'd been hoping to get the 5y fix from FD or HSBC, unfortunately im not in a position to get it for a few months, looks like I've missed the boat now! They're only going one way from this point...

That's a shame - FD allow you to book the rate for up to 6 months in advance. I won't be changing until May which is why I called in January to arrange it.

Not much help I know now but I believe most lenders allow you book some months in advance.

CloudCuckooLand

Chuckalicious,

Is your ERC a static 3%, however close you leave it to the end of the Fixed term? Some ERCs fall as they get closer to the end date...

I can't see you saving £6,500 over the new 5 year term, unless I've missed something in your expected savings.

Putting it the other way, if you put £6,500 into a savings account would the drip-feed of that offset your risk of a higher rate?

chuckalicious_2

CloudCuckooLand wrote: »

Chuckalicious,

Is your ERC a static 3%, however close you leave it to the end of the Fixed term? Some ERCs fall as they get closer to the end date...

I can't see you saving £6,500 over the new 5 year term, unless I've missed something in your expected savings.

Putting it the other way, if you put £6,500 into a savings account would the drip-feed of that offset your risk of a higher rate?

It's a fixed 3% right up until 31/10/2011.

You're right, I won't make back the £6500 over the 5 year term, but I am the kind of person who does not like uncertainty, ie waiting to see what the rates are like in October. Long term I'd probably be better off waiting, assuming nothing horrible happens rate wise, but, I was advised by my mortgage advisor and also my father (who used to work in mortgages and investments) that things are unlikely to change any time soon so don't rush off and book a rate just yet. Had I taken that advice I'd have missed out on the booking of the 3.89%.

Of course that said I don't need to take the mortgage offer. I can sit on it until April and if things are still rosy book another good rate with someone else to hopefully tide me over until October. I'd lose the booking fee but that'd be it.

I can't help but look solely at the monthly repayments, which are so similar with the switch in May and October, but there's another part of me that says to wait, don't add £6500 onto a mortgage if you don't have to!

Ah the choices!

johnbhoy10

Interesting this. I didn't realise they've just hiked them as i haven't looked at their rates for a while. I'm currently on their offset tracker at 1.99%+BR and am weighing up if it's worth booking a 4.29% 5 year fixed for the sake of £100. What 's the best unbiased comparison site these days after that directgov or whatever it was vanished?


sorry-forget that last line-just remembered it was moneymadeclear. Don''t know where i got that from.