Remortgage Lousy Offer

jimjames

deedee71 wrote: »

Hi Peter, yes really lucky I would say. I don't remember the lifetime mortgage being on offer when I got mine in 2007. Mine only tracked for a set period and I'm now on the SVR. It's great for the time being on 2.5% but makes for an uncertain future!

I may give them another call, but in February when I had 3 months to go they were most unhelpful.

Can I ask why you would want to remortgage when you can get an SVR of 2.5%? I doubt any offers on the market would match that.

Thrugelmir

jimjames wrote: »

Can I ask why you would want to remortgage when you can get an SVR of 2.5%? I doubt any offers on the market would match that.

The misbelief that low mortgage rates one will return one day.

neverdespairgirl

Thrugelmir wrote: »

Lloyds is under an EU directive to reduce its share of the UK mortgage market following the takeover of HBOS.

The sale of branches (as directed by the EU) will reduce Lloyds mortgage book by around £60 billion or 15% of total lending.

As the sale of the mortgage book looks difficult to say the least a reduction in lending across the whole group may be a current board policy.

Lloyds offered us a mortgage on a good rate a couple of months ago, but we've both banked with them for years.

Thrugelmir

neverdespairgirl wrote: »

Lloyds offered us a mortgage on a good rate a couple of months ago, but we've both banked with them for years.

The HBOS part of mortgage book is of far worse quality than Lloyds pre merger one. Like most lenders with the exception of HSBC they are happy to foresake quantity for quality. In an attempt to improve the overall margin on the loan books.

deedee71

Thrugelmir wrote: »

The misbelief that low mortgage rates one will return one day.

No, the belief that high interest rates will return one day!

I had a long and interesting chat with IF yesterday. They still only offer one product (4.89% 3 year fix, £999 arrangement fee). Much of their business now is to do with drawing down reserves - ie people on offset mortgages have built up a reserve so can effectively get a loan for 2.5%.

IF is up for sale and it's anyone's guess who will buy it as I gather it is parcelled up with TSB branches. As Thrugelmir says Lloyds must reduce their share of the mortgage market.

I don't necessarily want to fix straight away but when interest rates start to move, I'll need to be looking to switch provider (purely because of changes to the banking industry which came about after I took out a mortgage) and these things take time.

Thrugelmir

deedee71 wrote: »

No, the belief that high interest rates will return one day!

Many people expect mortgage deals of 2003-2008 to return in due course. Once base rate normalises. The shock will come when margins are maintained.

deedee71

Thrugelmir wrote: »

Many people expect mortgage deals of 2003-2008 to return in due course. Once base rate normalises. The shock will come when margins are maintained.

I'm sorry, I don't know what this means.:o

Thrugelmir

deedee71 wrote: »

I'm sorry, I don't know what this means.:o

In the credit boom years mortgage rates of base rate + .18% ; + .35% for example were available. These rates are no longer available. Though some people expect them to return one day.

Its highly probable that mainstream lending (SVRS) could be in a band of 2.25% to 3% above base.

So with a 5% base rate. Mortgage rates could easily hit 7% - 8% for average borrowers.

deedee71

Ok, I think we are on the same page, just saying it a different way.

Jimjames asked why I wanted to remortgage when I'm on 2.5%. My circumstances have changed immensely since 2008 and although I'm happy to hang fire at the moment, I will need to fix once rates rise. A rate of 8% would find me homeless within months.

I do believe rates will rise and the complication of IF.com being sold might makes things a bit more difficult. I'm not sure another lender will have me!

Thrugelmir

deedee71 wrote: »

Jimjames asked why I wanted to remortgage when I'm on 2.5%. My circumstances have changed immensely since 2008 and although I'm happy to hang fire at the moment, I will need to fix once rates rise. A rate of 8% would find me homeless within months.

Lenders are currently offering attractive fixed rate deals. The sting in the tail is the follow on SVR rate could be around 3.49%. This means that the lender is now in control. Depending on what happens in the future. They can maintain this margin above base.

I would suggest not being fixated by interest rates. Ones' focus should be on reducing the capital debt. The amount that is owed.

So if you have a mortgage rate of 2.5% Use it to your advantage. Overpay by the most you can reasonably afford to do. This way any future rise in rates has progressively less and less impact. Fixing is only ever a temporary respite as you'll still owe a considerable amount of money for many years.