Mortgage renewal

sammyjammy

villa2010 wrote: »

When InterEST rates go up. Do they usually go up slowly and if so by how much.

Do they not try and put them up gradually by 0.25% each quarter??!!

Well for starters they make the decision monthly. They don't go for graduality they do what they need to do . If looking at all the factors (and assuming no interference from the government ) the committee think it should go up 5% from one month to the next then thats what would happen.

Have a look at the history of their decisions on their website but history won't tell you what the future brings in this case (certainly not with masses of economic knowledge and stats).

Personally I don't think now is the time to go for a tracker, the only realistic way is up which for me means no benefit of a tracker, why not get a good five year fix and be able to stop worrying.

I had a tracker from October 07 to October 09 and it was one of the best decisions I made except to not make it longer but I wouldn't consider one now.

ETA here is the history http://www.bankofengland.co.uk/boeapps/iadb/repo.asp?travel=nixirx

grey_gym_sock

well, i'd be surprised if bank base rate went up at all in the next 2 or 3 years. further out, it's harder to say, though it won't necessarily rise even then. but it certainly can rise very quickly when it does rise.

that makes me think that 2 or 3 year fixes are pretty pointless. i'd either fix for at least 5 years, or not fix.

just an opinion, obviously ...

villa2010

How come when Bank of England interest rates are set at 0% you still get charged 4.79% and only for 2 years.

In France cant you get this current low fixed rate for 20 years???!!!

dunstonh

How come when Bank of England interest rates are set at 0% you still get charged 4.79% and only for 2 years.

How do you think banks get the money to lend?

They have to pay savers a rate to attract savings which in turn is lent to borrowers. They than have to factor in costs as well as debts that go bad and a profit margin (the margin is typically 0.5-3.0% depending on economic factors. Currently it is very low.

BoE rate is not 0% btw.

villa2010

dunstonh wrote: »

How do you think banks get the money to lend?

They have to pay savers a rate to attract savings which in turn is lent to borrowers. They than have to factor in costs as well as debts that go bad and a profit margin (the margin is typically 0.5-3.0% depending on economic factors. Currently it is very low.

BoE rate is not 0% btw.

Yes aware of that but I cant help but think how much interest they make from an average mortgage over 25 years!

Do you think that interest rates will increase over the next couple of years??!!

Thrugelmir

villa2010 wrote: »

Yes aware of that but I cant help but think how much interest they make from an average mortgage over 25 years!

In % terms not as much as you think. Mortgage lending is actually a low profit margin product for banks.

villa2010

Thrugelmir wrote: »

In % terms not as much as you think. Mortgage lending is actually a low profit margin product for banks.

I guess it depends on how you define "not a lot" and who you define it to!

What do you think could happen in the future with regards to IR.

villa2010

harvey115 wrote: »

You can shop around for a good deal. Your existing lender may also have an attractive deal that you may like.

Tracker mortgage are available of course with a percentage added to it i.e. Bo£ Base rate + 2.49% etc. However it is up to you to find a good deal with as many years you like fixing.

I think you should contact your current lender at this point to see what deals you have access to and if you find something cheaper you can go for that. If you stay with your current lender the process of acquiring a new deal is called 'switching' and if you borrow from another lender it will be called re-mortgage.

Hope this helps.

If you go with a tracker Mortgage is there a time period that you have to stay with them or can you change as and when you would like..??!!

villa2010

Does any one know roughly what rates you pay with under a tracker and if you have to commit to a time period?!

kingstreet

The rate varies. The term varies and the presence of early repayment penalties also vary.

You're going to have to research what you exactly want from a mortgage product, then try to establish if the features you are looking for are available in a single product, or if you have to compromise, or prioritise to get the most important things to you.