FTBs, fixed or variable mortgages?

Pimperne1

wotsthat wrote: »

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.

I have liked fixes in the past too but never anticipated that interest rates would go so low (or that some commentators would be saying that they would stay low for a protracted period). I don't think I would take a fix in the current environment.

wotsthat

Pimperne1 wrote: »

I have liked fixes in the past too but never anticipated that interest rates would go so low (or that some commentators would be saying that they would stay low for a protracted period). I don't think I would take a fix in the current environment.

If someone is worried about 'losing out' as the result of taking a fix then a fix is probably not for them.

I've always had fixes until I recently fell onto Nationwide's BMR at 2.5%:). I prefer the security of a fixed payment and am reconciled that at any time there may be better variable rates available.

andybenw

Well done on deciding to buy. The younger the age you buy at the younger you will be when the mortgage gets paid.

With only a 10 percent deposit 4.99% for 5 years sounds decent enough.

As you will be buying at only 2.5 income sounds like you will probably have spare cash to overpay. Just make sure you overpay correctly as depending on mortgage you may attract penalties or not recieve the full benefit if paid at wrong time.

Instead of overpaying it may be worthwhile considering lowering the term of the mortgage. eg from 25 years to 20 years. Overpayment is not then optional and you don't have to be quite as disciplined. Of course the flip side is that if you are overpaying and something untoward happens, you can immediately redirect that money each month.

Once you get the mortgage look at it long term, don't be too despairing if house prices drop a bit. Pay the mortgage off as quick as possible and eventually you will have years of rent/mortgage free living to look forward too.

Percy1983

andybenw wrote: »

Instead of overpaying it may be worthwhile considering lowering the term of the mortgage. eg from 25 years to 20 years. Overpayment is not then optional and you don't have to be quite as disciplined. Of course the flip side is that if you are overpaying and something untoward happens, you can immediately redirect that money each month.

This is exactly my thinking at first we won't be overpaying but buying bits for the house and it will always be nice knowing that we have the extra income as you say if something untoward happens.

I know what you mean with early payment penalties, if it comes to that I should be able to get reasonable return rates.

kabayiri

Just for fun Percy, get Kirsty & Phil to show you a whole host of houses over several days.

Even better, tell them you want a workaday home in Manchester, and a "bolt hole" for the weekends in Portugal. Then you get a free couple of days break somewhere sunny (and it might be sunny in Portugal too!).

Make sure you come across as wanting the Moon on a stick during the programme. It makes for better telly.

At the end you can wind them up by saying you have decided to part own a shed in Rhyl instead

Pimperne1

Although its got its fair share of wonkers Cc has some clever people on there too. The discussion on there presently might interest you:

http://www.creditcrunch.co.uk/forum/topic/10015-nevermind-greece-is-italy-now-on-the-ropes/page__st__31

reweird

Percy1983 wrote: »

I wil say this is a general question but I do need advice here on which would be better plan?

As it is I may be getting a mortgage sooner than my signature may say to which I do have the classic choice of mortgages.

Right now I can find a 5 year fix at 4.99% which seems great and would give real peace of mind but there is the potential to save by going shorter term fixs but then could get end up in a worse position.

So I guess the real question is, when do you think the BOE will raise the interest rates?

Aw bless, mummy finally decided it's time her man-baby actually grew up. :rotfl::rotfl::rotfl::rotfl:

Credit-Crunched

Question -

'If you opened your mail and your mortgage company was telling you your payment is going up by 98 pounds how would you feel?

a) sick as I am stretched every month and every penny counts
b) not too bad, i have some money left even after this increase and I have done well from the low rates up to now, however an increase is not too much of a concern for me

if a = fixed
if b = variable

very basic way of looking at things, where possible get some advice from a mortgage advisor that is specific to your situation. Irnonically a web forum is not the best place for an answer!

enjoy and good luck:T

Percy1983

Credit-Crunched wrote: »

Question -

'If you opened your mail and your mortgage company was telling you your payment is going up by 98 pounds how would you feel?

a) sick as I am stretched every month and every penny counts
b) not too bad, i have some money left even after this increase and I have done well from the low rates up to now, however an increase is not too much of a concern for me

if a = fixed
if b = variable

very basic way of looking at things, where possible get some advice from a mortgage advisor that is specific to your situation. Irnonically a web forum is not the best place for an answer!

enjoy and good luck:T

Good way of looking at it, it shows being on a web forum I am getting answer pointing both ways and both with good reason.

reweird wrote: »

Aw bless, mummy finally decided it's time her man-baby actually grew up. :rotfl::rotfl::rotfl::rotfl:

My mummy doesn't want me to go, I found a house which appears to be a bargain and can potentially sort the deposit rather quickly.

Funny thing is I will go from being a man-baby to a man, meanwhile you will still be a !!!!.

RenovationMan

Anecdotal and hearsay evidence points towards the first couple of years of home ownership being the most difficult financially. Especially if any building works are being undertaken. There is no way in the next couple of years that rates are going anywhere. If you can get a low 2 year tracker then I would do that.

Once you have settled into your new home and your new finances you'll have a better idea of whether you really need to fix or not.