Is my mortgage deal any good?

Thmas_Covenant

I have recently come to the end of a 5yr fixed rate deal that was at 4.69%.

I have always liked fixed rates and despite the fact they have been more expensive recently I like the certainty, and have been told by friends of their experience in the 80s of 12+% rates :eek:

However I have now reverted to the default rate for my mortgage which is base rate + 1.1%, making it 2.6%, which is nice and saves £200 a month (or allows me to overpay £200 a month). The base rate would need to rise to 4% by my reckoning for me to be worse off than before, and that looks unlikely (although a recession also looked unlikely 5 yrs ago).

Am I on a good deal?

anselld

Base + 1.1 = 1.6

Obviously that is a great deal for now!

BimalP

It really depends on your circumstances.
I think the question you are more asking is does anyone think the base rate will rise?
BR +1.1% is a really good deal in todays market, you will be hard pressed to find a SVR which is cheaper.
I think that even though the Base rate will rise in the next couple of years it is very unlikely to rise more than 1% or 2%, I can see that the next step will be putting it up to 1%, and then it will be stick for a while. It also very much depends on how much exposure the banks have got on the Greece, Portugal, Spain economy and whether the banks will need another bailout.

In my opinion, and if you can afford it whilst your on a cheap rate like that, try and overpay as much as possible, because the capital will come down quickly, and then if the base rate does increase you will have the option to fix at a later date... Just my opinion.

opinions4u

Thmas_Covenant wrote: »

I have recently come to the end of a 5yr fixed rate deal that was at 4.69%.

I have always liked fixed rates and despite the fact they have been more expensive recently I like the certainty, and have been told by friends of their experience in the 80s of 12+% rates :eek:

However I have now reverted to the default rate for my mortgage which is base rate + 1.1%, making it 2.6%, which is nice and saves £200 a month (or allows me to overpay £200 a month). The base rate would need to rise to 4% by my reckoning for me to be worse off than before, and that looks unlikely (although a recession also looked unlikely 5 yrs ago).

Am I on a good deal?

It's a good deal. Keep it, but religiusly do the bolded bit. Get the debt down.

Owing less if rates rise is a good thing!

SAHD_Jim

Thmas_Covenant wrote: »

I have recently come to the end of a 5yr fixed rate deal that was at 4.69%.

I have always liked fixed rates and despite the fact they have been more expensive recently I like the certainty, and have been told by friends of their experience in the 80s of 12+% rates :eek:

However I have now reverted to the default rate for my mortgage which is base rate + 1.1%, making it 2.6%, which is nice and saves £200 a month (or allows me to overpay £200 a month). The base rate would need to rise to 4% by my reckoning for me to be worse off than before, and that looks unlikely (although a recession also looked unlikely 5 yrs ago).

Am I on a good deal?

do you mean your default rate is 1.6% or that the rate is actually base + 2.1%?

BoE + 1.1% is very good these days. BoE + 2.1% is still not bad.

One thing to check, if you did decide to stay on it and overpay, is whether there is any provision for your mortgage lender to vary this rate. As long as your rate is guaranteed not to exceed what it currently is, then there will be no surprises around the corner.

hillcats

Is it Bank of England "base rate" = 0.50% + or your current lenders "base rate" = ? +
If it is BofE then you are better off, if it is your lenders base rate then you are at their mercy if they decide to raise...

Gorgeous_George

Who knows what interest rates will do? The Condems have thrown out the rule book when it comes to running UK PLC.

A fixed rate provides the security of knowing what your repayments will be. In an uncertain world, that has an oncreased value.

However, you have a 'once-in-a-lifetime opportunity to pay just 1.6% on your mortgage while you can save at twice that rate or even more (hence it would be stupid to overpay).

The greater the difference between your variable rate and the alternative fixed rate is the insurance premium. It is the cost of buying that security. IF base rates do not rise over the next five years you will pay £12,000 in insurance premiums if you take the fixed rate.

Only you know the value of the peace of mind that a fixed rate offers.

GG

handytips

Lots of people here giving opinions but it is quite obvious none of you know what you are talking about.
the OP is on BBR + 1.1 If the mortgage is not portable then i would hazard a guess that the lender is not a high street lender, which may suggest other factors.
If you are going to move then perhaps a medium to long term fixed may suit you. At the moment whichever way you look at it, you are on a good deal.
FACT. Rates WILL Rise.

dimbo61

So I think the general opinion is to go onto the base rate tracker of 1.1% plus base and save like mad into cash ISA,s over the next few months or years!
When you come to move home you will have some savings to pay towards the fees or bigger deposit and port your existing deal if you can ( this depends on LTV )
If you can port the deal then you will have to borrow the rest from your current lender

Gorgeous_George

handytips wrote: »

FACT. Rates WILL Rise.

You are a mortgage adviser - not a fortune teller.

You are probably right (that rates will rise) but without a timeframe, your prophecy is meaningless.

dimbo61 is not a mortgage adviser (I think) but sums up the situation very well.

FWIW, some mortgages allow further borrowing at low tracker rates (such as mine at BofE+0.74%).

GG

anselld

handytips wrote: »

Lots of people here giving opinions but it is quite obvious none of you know what you are talking about.
.

A rather sweeping statement from someone who has added very little useful advice!