FTBs, fixed or variable mortgages?

pinkteapot

I don't think the fact you're FTBs is relevant (apart from any special bank mortgage deals available only to FTBs). What matters to anyone buying a house in terms of this decision is (1) how risk averse they are and (2) how much flexibility there is in their monthly budget.

We bought last August and went for a lifetime tracker at base +1.99%, so have been paying 2.49% since then. We can comfortably afford higher repayments each month so aren't worried about the inevitable rate rises happening. Because it's not a 2/3/5 year product, overpayments are unlimited from the start. We are currently overpaying massively each month. This is possible because we currently both earn well but bought a house sufficiently cheap that one of us can give up work as and when we have kids. On a 2/3/5 year deal, overpayments are normally limited to 10% of your standard monthly repayment so we would have had that cash piling up in savings accounts earning a pittance while we continued to pay a higher rate on the mortgage loan.

Personally I think that I would be even more likely to opt for a tracker again now than when we bought last summer. I think the global economy is higher on the f***tometer scale than it appeared to be last year. When we bought, I was expecting interest rates to start rising sometime around now. Now I don't see it happening for another year at least.

This calculator is useful for seeing what your repayments change to as the interest rate changes:
http://www.guardian.co.uk/money/mortgage-calculator

As noted above, LIBOR is the key determinant of fixed rate mortgage rates and that's heading up so deals may start changing soon. When are you looking at buying?

Thrugelmir

HAMISH_MCTAVISH wrote: »

With margins like that, do remember to address your bank manager as Mr Turpin, and avoid the temptation to just call him "!!!!!!".

New tracker mortgage rates are following LIBOR. Like DT, lenders are quietly going about their business.

On Wednesday, the Chelsea Building Society put up the cost of some of its most competitive tracker mortgages by 0.2%.

In recent weeks, the Halifax raised its two-year tracker by 0.15% to 3.34%, while Woolwich increased the rate its trackers revert to after two years by 0.4%.

Santander pushed up its Abbey-branded lifetime tracker in two moves from 2.95% to 3.09%. Nationwide and ING have also raised some rates as well.

http://www.bbc.co.uk/news/business-15677498

Percy1983

pinkteapot wrote: »

This calculator is useful for seeing what your repayments change to as the interest rate changes:
http://www.guardian.co.uk/money/mortgage-calculator

As noted above, LIBOR is the key determinant of fixed rate mortgage rates and that's heading up so deals may start changing soon. When are you looking at buying?

We are potentially making an offer on a house in the next 2 weeks (if all goes to plan).

Calculator looks interesting, thanks.

Graham_Devon

Percy1983 wrote: »

We are potentially making an offer on a house in the next 2 weeks (if all goes to plan).

Calculator looks interesting, thanks.

Will you turn into an intstant uber bull in a couple of months time too?!

pinkteapot

Maybe he'll turn into someone with a happy home and no particular interest in what it's worth until such time as he wants to move.

Wheezy_2

Graham_Devon wrote: »

Will you turn into an intstant uber bull in a couple of months time too?!

Percy is not a bull nor a bear.

Percy1983

Graham_Devon wrote: »

Will you turn into an intstant uber bull in a couple of months time too?!

I will become a 'real man' so who knows what I will become as my whole personality and way of thinking will change over night.

To be honest once I have a home as long as I can afford the payments I am not too worried what happens to prices, locally I am buying into a falling market and I really don't mind. Once I have a home I won't want to pull the ladder up to stop anybody else buying. In many respects thats we are going straight to the 3 bed semi as a 'house for life' there is a potential we will clear the mortgage before we ever need to move.

Mallotum_X

I assume the £1291.20 deposit fund has grown a little or are you buying in the middle of Burnley?

Percy1983

The house is actually in New Moston so I would be migrating to Manchester.

As it is the 'perfect' house may have come up at the 'perfect' price, so with deposit growth past that of last month + selling one asset to buy another it might just work.

wotsthat

I've always tried to fix as I prefer the security of knowing what I need to budget for each month although I've tended to go for 2 or 3 year fixes rather than 5.