interest rates going up tday?

cordial

I have a fixed rate one going through the application process. My broker tells me that the money is committed at the quoted rate, provided valuation etc are ok and should not be affected by any BoE announcement.

Can I take this as read, then?

LOST

gone up to 5%!

redballoon_2

thanks for the replies. think i will stick with my variable rate for now. i am able to afford the repayments as there is two of us bringing home a wage.

Gorgeous_George

There's more to mortgages than interest rates.

Arrangement fees, early redemption fees, survey costs, etc., can add significantly to the headline rate. The shorter the fix, the more impact of these 'stealth' charges.

I would never fix for two/three years and probably not for five. A ten year fix could be more attractive if the rate was right but, just like ajb_tic_tac, I prefer to take the rough with the smooth and pay a fair rate. I don't think I'll be changing my tracker mortgage - ever.

With the short term fixes, you have to hope that when the tie-in ends, interest rates will be low-ish and your house will have sufficient equity to put you in a stronger position when negotiating/selecting a new deal. It is possible that rates will be anything upto 6% in three years time. Those who have fixed deals ending at that time, could find taht their house is worth less than the mortgage outstanding (negative equity). This would make it difficult to move mortgages and the SVR could be unaffordable. The only option left being to sell a house and realise the negative equity.



GG

cordial

I thanked you for the effort you put in!... but really there can't be any argument about someone who's got him or herself a fixed rate of, say, 4.75% for the next three years if the average going rate over that period turns out to be 6+%, as some are predicting. You'd have to have some pretty remarkable 'associated costs' not to make a considerable saving.

You're also ignoring one of the major arguments for fixed rate, i.e. people want the certainty of knowing that there's going to be no change in a repayment that they've already calculated they CAN afford. For some, myself included, this is a huge consideration.

PoorDave

Gorgeous_George wrote:

With the short term fixes, you have to hope that when the tie-in ends, interest rates will be low-ish and your house will have sufficient equity to put you in a stronger position when negotiating/selecting a new deal. It is possible that rates will be anything upto 6% in three years time. Those who have fixed deals ending at that time, could find taht their house is worth less than the mortgage outstanding (negative equity). This would make it difficult to move mortgages and the SVR could be unaffordable. The only option left being to sell a house and realise the negative equity.

And then begins the crash!

Unless we're savvy enough to plan around such circumstances, which lets face it, isn't impossible

housebuyer_abc

Glad I booked my mortgage on Tuesday at 4.79 fixed it snow cheaper than base rate and I haven't even started to pay it yet.

lisyloo

but really there can't be any argument about someone who's got him or herself a fixed rate of, say, 4.75% for the next three years if the average going rate over that period turns out to be 6+%, as some are predicting.

I agree with your point but can you back it up and tell us whose predicting 6%+.
My understanding was that 5.25 is the concensus view in the city with 6% being the top end of the range of possibilities.
I would be glad to see it if this has changed or there is some other information out there.

Cheers

marcovan

cordial wrote:

I have a fixed rate one going through the application process. My broker tells me that the money is committed at the quoted rate, provided valuation etc are ok and should not be affected by any BoE announcement.

Can I take this as read, then?

I too have only just signed the declaration on our mortgage application last night with my broker. Will the rate mentionded in the Key Facts Illustration he showed us remain unaffected by today's rise?

Thanks

lisyloo

I switched to a fixed rate with Britannia a couple of weeks ago.
I was told that when I had completed the application (done by phone call) that the rate was secured (there was paperwork to follow on afterwards).

Usually it is secured once your application has been accepted (and that can be done over the phone with signatures to follow).

If in doubt then call the lender.