remortgage advice needed

seanjake

Advice needed please - I am just about to run out of a discounted mortgage with Northern Rock but am still in penalty time but dont want to go back to full price rate can anyone give me some advice my house if valued at approx 110,000 and I need mortgage of 50,000.

Cheers

lisyloo

I am just about to run out of a discounted mortgage with Northern Rock but am still in penalty time but dont want to go back to full price rate can anyone give me some advice my house if valued at approx 110,000 and I need mortgage of 50,000.

If you are just about to run out then you have left it a little late.
remortgaging takes 6 - 8 weeks so you should start researching about 2-3 months before the end.

You will probably have to go onto the full rate for a short time because you won't be able to get remortgaged in time.

Last time I looked Nationwide were doing decent rates.
From 4.79% for a 2 year discount tracker.
But check some of the search engines as you might be able to find something better.

Personally I wouldn't get a fixed rate at the moment as I believe that interest rates have almost peaked.

payless

Its number cruch

compare the standard rate against benefits of swapping to a new rate either with NR or eslewhere
--
swapping will incur early redempion penalty, and in most cases some other costs as well

martinhp

For an arrangement fee N Rock will offer you any of their new business rates. Ranging from 4.89% fixed for 18 months.

seanjake

Thanks. I have spoken to N Rock and they can give me either 3 year discounted or 2 year fixed 5.99% am tempted by the fixed knowing what my payments will be for the next 2 years and then no penalty so can get another product after that one but is it a good time to get fixed rate what is the opinion on how the rate is going to go up/down anyone have a crystal ball?

lisyloo

No-one has a crystal ball but I refer to:

1) The bank of England inflation report that came out in August
2) Recent Bank of England Monetary Policy committee meeting minutes
3) Reports of forecasts from economists
4) Short sterling futures

The expected peak of interest rates is now 5.0% - 5.25% (currently base rate is 4.75%).
There is debate as to whether they will stay level after that or come down.
Short sterling futures show rates at this level out til 2006.
Most economists expect them to come down after the peak (maybe 6 months after the peak).

Recent figures on house prices and mortgage lending show that the last 5 rate rises are doing the job intended and and it looks like very little more with be needed.

Recent house price surveys show prices falling and mortage lending was down significantly in August (some of the surveys take account of seasonal factors).

There can still be some very good reasons for taking a fixed rate - if your attitude or circumstances find it desirable.

However all the forecasts are showing that we are now very near the peak and after that rates will probably fall or possibly stay level.
There are no forecasts that I have seen showing rates rising further.
The highest I've seen predicted is 5.5% but mosts are in the range 5.0% - 5.25% and even 4.75% is a possibility.

Obviously bear in mind that there are predictions and with the best will in the world, there is always a chance of some unexpected economic shock (like 9/11).

Personally I wouldn't go for a fix right no, but it depends on how much you can risk rising interest rates and how comfortable you are with it.
It's an individual decision.