Re-Mortgage - 5 year deals

CBN

kingstreet wrote: »

Any lender which is using FLS is funding its lending at 0.5%pa, that gives quite a margin to reduce the rate if it wants to really compete for market share.

These are only the opening salvos in the rate war which will probably unfold this year.

It's not quite as cheap as that. The FLS fee for a collateral upgrade is 0.25% and then banks still need to raise cash against the collateral at market rates. Normally that would be the policy rate so 0.25% + 0.50% = 0.75%. That said, secured rates in the market are about 0.40% at the moment so the current cost of FLS funding for banks is about 0.65%.

latecomer

Flash_G wrote: »

I saw that deal but unfortunately I don't think valuation and legal fees are included:

http://www.postoffice.co.uk/our-full-range

Good point, I was just shocked that there was a lower headline rate.

We should be completing our remortgage with the Co-op in the next day or so, still very happy with our 2.79% rate

michaels

CBN wrote: »

It's not quite as cheap as that. The FLS fee for a collateral upgrade is 0.25% and then banks still need to raise cash against the collateral at market rates. Normally that would be the policy rate so 0.25% + 0.50% = 0.75%. That said, secured rates in the market are about 0.40% at the moment so the current cost of FLS funding for banks is about 0.65%.

Is that the same for any length of borrowing though or is that a floating rate? What does the 5 year money to support deals like this cost?

Flash_G_2

latecomer wrote: »

Good point, I was just shocked that there was a lower headline rate.

We should be completing our remortgage with the Co-op in the next day or so, still very happy with our 2.79% rate

There might turn out to be a few lower rates or lower fees, but you can't not be happy with the 2.79% rate.

We will be applying over the next few days.

latecomer

Will be interested to hear how you get on - was painless for us.

Biggest problem we had was figuring out a good way to reduce the balance during the remortgage without having to go to their solicitors on the other side of the country for anti-money laundering regulations.

Flash_G_2

latecomer wrote: »

Will be interested to hear how you get on - was painless for us.

Biggest problem we had was figuring out a good way to reduce the balance during the remortgage without having to go to their solicitors on the other side of the country for anti-money laundering regulations.

I can't see why there would be any problems, fingers crossed. My main problem is my phoneline hasn't been working!

We won't have that issue with anti-money laundering, we are increasing our mortgage by £10k to pay for some work on the house (kitchen and windows). Going to try and not do anything else to the house in the next 5 years

kidmugsy

latecomer wrote: »

still very happy with our 2.79% rate

I'll bet: annual increase in Retail Prices Index 3.1% (December 2012).

In "real" terms they're paying you to borrow from them. How will house prices respond? Bubble, bubble.

Southend1

kidmugsy wrote: »

I'll bet: annual increase in Retail Prices Index 3.1% (December 2012).

In "real" terms they're paying you to borrow from them. How will house prices respond? Bubble, bubble.

What's the current rate of nominal wage increases though? I bet the average is less than 3.1%.

Thrugelmir

Southend1 wrote: »

What's the current rate of nominal wage increases though? I bet the average is less than 3.1%.

Around 1.6%.