10 Year Fix at 5.05%

cwcw

Our mortgage offer expires in a couple of weeks and it's unlikely we will complete before then. As a result I've been shopping around and have found a 10 year fixed rate mortgage at 5.05% (nearly as good as the 2 year 4.89% we're about to lose). The arrangement fee, which is added to the loan, is £895, but since we'd not be having to remortgage every couple of years, this would save money in the long term.

Assuming that we won't get our offer extended, would this be a good mortgage to go with instead, rather than just going for the "new version" of our expiring mortgage which is now 5.34% for the 2 year fix? We'd lose the £280 valuation fee, but the product fee on our expiring mortgage has since gone up to £999.

The 10 year fix is portable, so we can transfer it if/when we move within the 10 year period. I've scoured the market and this is the best 10 year fix I can find, and I kind of like the stability of knowing exactly what I'll be paying for 10 years without having to worry about price crashes, interest rate rises, etc, at what is still historically a low rate of 5.05%.

nelly_2

whos it with?

isayoldchap

cwcw wrote: »

Our mortgage offer expires in a couple of weeks and it's unlikely we will complete before then. As a result I've been shopping around and have found a 10 year fixed rate mortgage at 5.05% (nearly as good as the 2 year 4.89% we're about to lose). The arrangement fee, which is added to the loan, is £895, but since we'd not be having to remortgage every couple of years, this would save money in the long term.

Assuming that we won't get our offer extended, would this be a good mortgage to go with instead, rather than just going for the "new version" of our expiring mortgage which is now 5.34% for the 2 year fix? We'd lose the £280 valuation fee, but the product fee on our expiring mortgage has since gone up to £999.

The 10 year fix is portable, so we can transfer it if/when we move within the 10 year period. I've scoured the market and this is the best 10 year fix I can find, and I kind of like the stability of knowing exactly what I'll be paying for 10 years without having to worry about price crashes, interest rate rises, etc, at what is still historically a low rate of 5.05%.

I am not an IFA but adding £895 for ten years at 5.05% p.a seems a little expensive and does add up.I would see if they let you pay it in full or if you can't consider another deal.

The idea of a ten year fixed deal can also be worrying.Things can change with peoples lifestyles.You maybe due some inheritance from a parent.Sorry but things can happen when you least expect it.If you then decide to pay off your mortgage that could be very costly in fees.Have you worked out the penalties if you had to get
out of the deal beforehand.Don't expect the lender to be nice if you get problems.Do your sums and don't just look at the low rate.

What about your deposit.Hopefully you are not being charged any Loan to Value rates.My guess is you are asking for a mortgage around 75% of the valuation.

I would personally do alot more searches.In my position I would opt for a 5 year deal fixed with
hopefully no fees at all and hopefully a valuation fee or some solicitors fees returned from the lender as a sweetener.I would also hope to see if after 5 years I could leave without any penalties,but I may opt to stay on their variable rate for a year.
Of course your 5.05% looks great but I would expect my starting rate to be higher than that without any charges.
Probably half of on % higher to 5.39%+

What's the APR you have been quoted?

Unsure how the final balances work out on paper,but alot of sites can give you a calculation when you input your figures.

Finally if you do leave your present company check that their exit fees agree with your original contract when you joined.You may want to claim otherwise.

tonydee

Thats a very competitive rate and I would 100% go for it.

hearts

VERY competative indeed...Why haven't you answered where it is?

MJMum

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Tiger_greeneyes

:shocked: That's an excellent deal!

mchu6am4

Gone quiet for some reason!

cwcw

isayoldchap - I don't think £895 is a high fee. Most of the 2 year fixes are that rate. I can't see ANY fixed deals anywhere that pay the fees for you, without adding so much on to the interest rate that it makes it a bad idea. We have 10% deposit. 20% deposit secures a 10 year fix at 4.95%!

I'm worried if I reveal my source, everyone will apply and it will be taken away before my original mortgage offer expires! After double checking it's actually a £999 application fee, £150 of which is taken up front and non-refundable, £849 added to the mortgage. However, the valuation fee is lower than what we paid for our original application.

APR on the deal I would go for is 6%. There is a sting in the tail with regards to paying off during the fixed term (5% during first 5 years, then 4%, 3%, 2%, etc) but it does allow overpayments of up to 10% of the balance each year.

If I was to find myself with a large inheritence, not being able to pay off the mortgage with it straight away wouldn't be a problem - afterall, the interest rate for the mortgage is lower than the best savings accounts out there, so I'd just stick the lump sum away and pay off the mortgage at the end of the fixed period.

To me, the risk of interest rates falling significantly below 5.05% for any significant period of time seems unlikely, especially as we're still in times of historically low rates and inflation is creeping up.

mchu6am4

Personally, I don't think they'll take off the offer because there's too many people applying - that's what they're there for! To make money and they'd only be too happy to get more customers (and maybe on the plus side, applicants would be going direct to them rather than through IFAs etc., hence not having to pay commission either.)

I have a First Direct fixed rate offset mortgage at 5.39% for seven years. The fees were £400 (fixed rate booking), £300 (arrangement) and valuation for £180 (for £160k property). although I had a full building survey at £630.

You can make overpayments as much you like providing you don't pay off in full during the fixed rate period (but if you did this, then the rates are a bit lower than quoted above - 3%, and then 2% etc.)

They still have a similar offer for ten years fixed rate at 5.49%

Ash

AceCobra

cwcw wrote: »

isayoldchap - I don't think £895 is a high fee. Most of the 2 year fixes are that rate. I can't see ANY fixed deals anywhere that pay the fees for you, without adding so much on to the interest rate that it makes it a bad idea. We have 10% deposit. 20% deposit secures a 10 year fix at 4.95%!

I'm worried if I reveal my source, everyone will apply and it will be taken away before my original mortgage offer expires! After double checking it's actually a £999 application fee, £150 of which is taken up front and non-refundable, £849 added to the mortgage. However, the valuation fee is lower than what we paid for our original application.

APR on the deal I would go for is 6%. There is a sting in the tail with regards to paying off during the fixed term (5% during first 5 years, then 4%, 3%, 2%, etc) but it does allow overpayments of up to 10% of the balance each year.

If I was to find myself with a large inheritence, not being able to pay off the mortgage with it straight away wouldn't be a problem - afterall, the interest rate for the mortgage is lower than the best savings accounts out there, so I'd just stick the lump sum away and pay off the mortgage at the end of the fixed period.

To me, the risk of interest rates falling significantly below 5.05% for any significant period of time seems unlikely, especially as we're still in times of historically low rates and inflation is creeping up.

Then apply for the offer now and share it with everyone else. hardly prudent to come asking for advice then not share your finding's with those who offer the advice.

I'd agree 5.05% is a great rate in todays climate and if it where me in your shoes I'd snap it up.

Martin.