FTB with big deposit. Good time to tie into a fixed rate for 10years?

mickym

here are the charges:

7% to 30/11/14
6% to 30/11/16
4% to 30/11/18
2% to 30/11/20
1% to 30/11/21

If the product is repaid in full or in part, or transferred (in full or in part), an early repayment charge is payable as described above. However, overpayments (monthly or lump sum) up to a total of 10% of the outstanding loan per year are allowed without charge. Any amount repaid over the 10% limit will incur a charge of the percentage specified on the excess amount.

Thrugelmir

mickym wrote: »

Yes I see what you mean..but no... dont intend moving.

I see this as our family home to last us at least 10 years.

That's what everybody says.

Hence my question. Don't be dazzled in the headlights so to speak.

mickym

Thrugelmir wrote: »

That's what everybody says.

Hence my question. Don't be dazzled in the headlights so to speak.

Yes I know.

The place ticks all our boxes though...we are very happy with our purchase!

we have been renting our existing property for 4 yrs only down the road from where we are buying... so pretty much its home from home in a way.

ruggedtoast

mickym wrote: »

here are the charges:

7% to 30/11/14
6% to 30/11/16
4% to 30/11/18
2% to 30/11/20
1% to 30/11/21

If the product is repaid in full or in part, or transferred (in full or in part), an early repayment charge is payable as described above. However, overpayments (monthly or lump sum) up to a total of 10% of the outstanding loan per year are allowed without charge. Any amount repaid over the 10% limit will incur a charge of the percentage specified on the excess amount.

Without a crystal ball who knows. The ERCs are punitive for the next 8 years so if you have to sell up you'll take a hit. People's circumstances change and a lot can happen in a decade.

Remember to take the portability aspect of the mortgage with a pinch of salt. They arent obliged to let you port and may well not do if you dont meet their lending criteria in the future.

My personal feeling is that a 10 year fix is a bit too long unless you are in the forever house and definitely wont ever need to move for work.

mickym

So it seems like the main reservation many have tieing into this length is the fact that you may not be able to move.

All of my family and friends have not moved once from buying their home.... and we do not intend to either.

We currently been paying £630ish in rent for last 4 yrs so to get this similar figure when buying a house for 10yrs sounds great value.

In fact the property we are looking at buying has potential for extension, so if we were to come into any extra money and wanted a bigger place that would probably be the more likely option anyway.

Ms_Scarlett_2

Coversely, I think we probably won't fix for 10 years as I have no idea where we'll be or what we'll be doing by then. We have no kids at present, and as the place we're looking at is a three bed it does have family potential, but if I end up popping out 6 kids between now and 2021, we'd be a bit screwed.

I think we'll go for a five year fix. Now just fingers crossed we actually get it. We'll hear at some point today, so we're told. I am very very nervous indeed. Please be kind, YBS! I'll be good! I'll be good!!!!

dimbo61

Both deals for the 5 year fix and the 10 year fix are very good!
You are both going into this with your Eyes wide open and know all about the ERC,s
Some people have to move around the country because of job, family, wanting to live by the sea, city life,country but if you plan on staying 5 years at least or longer then both deals offer security.
Yes the ERC is large and you dont to be paying that in 2/3 years but you have the option of overpaying by 10% each year which could mean a much smaller mortgage in 5/10 years
Good LUck

ghaffa11

I am in a similar boat to you, we have just gone for the YBS 10 year fix @ 4.19%. To us, the certainty this gives us alone is worth it. If interest rates were 7% say (although seems unlikely) we would not be able to pay our mortgage. Furthermore, historically a 10 year fix at 4.19% is amazing value.

We initially applied for the 4.99% but as rates have fallen we have been lucky enough to switch to the lower rates although we have had to pay 195quid each time. Goodluck

mickym

Thanks all.

We have one child, but plan to have one more...but this home offers the space to expand if need be.

Even if we did want to move kids could share bedroom up till they are 10 anyway, its only when they hit near teens then giving them their own space may be an issue.

I like the financial security of 10yrs paying a rate we have been used to and able to manage easily for the last 4, even with my partner being off with our baby.

In 10yrs time, the chances of my partner working more hours is more realistic, so will mean for the next 10yrs we will be mortgage worry free so to speak.

I think its just a bit daunting that its tied in for so long... but in all seriousness..if your buying a home not for an investment but as a home, your going to stay in it for 10yrs at least.

Evilm

mickym wrote: »

I think its just a bit daunting that its tied in for so long... but in all seriousness..if your buying a home not for an investment but as a home, your going to stay in it for 10yrs at least.

Thats a broad brush you are tarring everyone with. Lives can change beyond your control and what your current plans are may not be the same in a few years. Worst case scenario and you need to move for accessibility reasons (as one of my friends has) or have to move in an elderly relative (as many people do end up doing) it won't be obvious in your current plans (Let alone job issues as well).

Personally I see nothing wrong with the 10 year fixed as long as you are prepared to take the risk if your life changes and you end up paying the ERC.