Can sum1 point us in the right direction...

alberto2012

Hi all,

My wife and I are looking to buy our first home.
The property value / purchase price is £125,000.

We have a deposit of £31.250..
Giving us a LTV of 75%...

Ou heads are spinning on which mortgage deal to choose?!!

Can anyone suggest any good deals out there we should be looking at / staying away from....

We are in two minds whether to go for a:
2 year tracker at 3.29% with Accord, £414 per month....
or
5 year fixed at 4.19% with Nationwide, £459 per month
or

I kow this is ultimately our decision to make, and its down to luck in the current climate etc regarding base rate etc.....

But any advice would be much appreciated! ;-)

Thanks

originalmiscellany

Surely...
HSBC 5 year fix at 2.99 would be the best? Do you have perfect credit records to date? HSBC are very picky in who they accept, but I think that would be the best decision despite the 1500 setup fee cost. Long term it allows you to overpay (20%) and also gives you a lower monthly rate which will let you hopefully get into a strong position over the next few years.

Have you also factored in the cost of a new house, where you have to pay thousands generally in the first few months as you establish your nest?

Simon_gloster

Isn't that ghostly HSBC rate max 60% LTV I read on another thread.

OP if you dont know what you want/need get advice.


No point getting answera on here....i say 2 yr deal, my mate trackers.

Someone needs to have a lengthy discussion with you on your preferences.

originalmiscellany

Maybe Simon G. I thought it was 75% but I've not been on this board much recently...

originalmiscellany

Yes you're right 60%. Either way a broker would be a good starting point...

alberto2012

alberto2012 wrote: »

Hi all,

My wife and I are looking to buy our first home.
The property value / purchase price is £125,000.

We have a deposit of £31.250..
Giving us a LTV of 75%...

Ou heads are spinning on which mortgage deal to choose?!!

Can anyone suggest any good deals out there we should be looking at / staying away from....

We are in two minds whether to go for a:
2 year tracker at 3.29% with Accord, £414 per month....
or
5 year fixed at 4.19% with Nationwide, £459 per month


I know this is ultimately our decision to make, and its down to luck in the current climate etc regarding base rate etc.....

But any advice would be much appreciated! ;-)

Thanks

OR a 2 year fixed at 3.55% = £427 per month... ??

Tomorrow is decision day.... aagghh help!!

catwoman73

Are there any lifetime trackers that are suitable (HSBC usually have a good range, but you have to go direct, rather than use a broker). The fees included with short term deals these days often outweigh any saving and its only in the interest of the banks and brokers to have to pay these every few years. I'd take the best lifetime tracker I qualify for and make sure I'm saving a bit each month as insurance in case the rate goes up.

R_P_W

It depends on how much you can afford to pay. Obvioulsy you want to pay as little as possible in interest over both the short and long term.

Generally speaking you can probably get a 2-3 year tracker that will have a lower interest rate than a fix rate. The question is why are you considering a fixed rate? Is it because you might struggle to afford an increase in payments?

Some people like the security of knowing they have a fixed payment for a set period of time, nothing wrong with that but you will probably be a paying a premium for it. You also need to consider the follow on rates - so in 5 years time after your fixed rates end - what are you planning to do? if interest rates go up in next 5 years, you will be protected from them in a 5 year fix, but when you come to re-mortgage you might end up paying more.

With a tracker that has a slightly lower % you could still pay the actual amount you would have paid per month on your slightly more expensive fix, so this would effectively be an overpayment. If rates rose to what the fix would have been you have not lost anything. If they rise higher than that in say 3-4 years, you will have reduced the impact of the rise by overpaying the capital.

Sorry I know my earling morning ramble might not make sense! In summary if it was me, if i was fixing i would do so for 5 years and find the best rate i could with a lender that doesnt have a high SVR (at the moment). Or get a 2 year tracker the lowest i can and look to overpay (which I have just done with Nationwide).

alberto2012

Ive did some basic maths, and if we were to choose the 5 year fix then we would be paying more (obviously) than if we were to pay say a 2 year + a 3 year (at todays rates anyway..)

even after adding up the exit fees, all other fees when remortgaging in 2 years time, it would still be cheaper than the 5 year fix...

We dont mind taking the gamble with the tracker at the moment.
Again, after calculating even if the base rate was to go up to 1% in next 2years we feel we could handle they payments...

This is our first time applying for morgtage, and feel it a better option to go through a broker as opposed to doing it ourselves, maybe this limits our options in terms of 'direct' lenders.. but just want to get our foot in the door so to speak!

Thanks for all advice so far... Its all a big learning curve...

xxSaffronxx

Simon_gloster wrote: »

Isn't that ghostly HSBC rate max 60% LTV I read on another thread.

OP if you dont know what you want/need get advice.


No point getting answera on here....i say 2 yr deal, my mate trackers.

Someone needs to have a lengthy discussion with you on your preferences.

Yes its 60% LTV

Morgage_Confused

Also it wouldn't be cheaper than the 3.49% fee free mortgage. 100k is approx the cut off point for the 2.99% fix due to the high product fee.