5 year interest rates drifting?

wotsthat

In June/ July I reserved a 5 year fixed rate with Nationwide at 2.99% with no fee.

Not long after the same deal was 3.09% with no fee.

Today it's 3.09% plus a £99 fee.

I have a mortgage on a second place which is fixed until January 2015 (3.69%). I can't decide whether to tap up Nationwide for an additional sum (3.09%) against main property and stick it in the bank until 2015 or just take whatever is on offer in 2015.

That aside - anyone else noticing a shift upwards in longer term mortgage rates?

cells

My crystal ball says....

Yes no maybe, I dont know, can you repeated the question...

michaels

Can you get 3.09% net in the bank?! What is the ERP on the 3.69 rate?

Yes rates have drifted since a low point late spring / early summer especially at the low LTV end whereas 2 year rates have fallen by up to 50 basis points, however I think the YBS 2.44% 5 year fix is still available?

System

I've been keeping an eye on the 5 year 20% deposit ones and they haven't really changed for a long time.

coastline

savings rates are also moving up slowly...earlier this year a 1 year fixed rate bond was around 1.75%...now up to 2%.

Generali

Swap rates which banks use to price fixed rate loans are slowly rising.

It's a reflection of the recovery in world economies and the assumption that interest rates will rise as a result.

wotsthat

michaels wrote: »

Can you get 3.09% net in the bank?! What is the ERP on the 3.69 rate?

Yes rates have drifted since a low point late spring / early summer especially at the low LTV end whereas 2 year rates have fallen by up to 50 basis points, however I think the YBS 2.44% 5 year fix is still available?

It would be an easy decision if I could get 3.09% net - I'd just borrow the money, stick it in the bank and wait for the current fixed rate to expire. Can't remember the ERP off the top of my head but it's large enough to make simple refinancing unattractive - I'm stuck with it until the start of 2015 although I can pay off a chunk without penalty.

I need to know what a 5 year fix will cost about this time next year. Obviously it would be inappropriate to ask Jim'll Fix It so I thought I'd try you lot.

Loughton_Monkey

wotsthat wrote: »

......

I need to know what a 5 year fix will cost about this time next year. Obviously it would be inappropriate to ask Jim'll Fix It so I thought I'd try you lot.

I'm not 'up' on mortgages these days. But I would very strongly suggest you consider an offset one. As far as I know, fixes are available and they don't look any more expensive that standard ones. You will only get one with a reasonable LTV.

I know of not a single 'negative' with them. It's all positive. You can make it 'behave' exactly the way an ordinary repayment would behave, or you can treat it as Interest Only, or hop on and off as you please.

At times, there is no 'edge' to it, but at other times there is usually an 'edge'. In other words, they are either (a) the most superb tax free home for your instant savings, or (b) a source of 'cheap' money that you can bung into savings and make a few quid on the turn.

MFW_ASAP

Loughton_Monkey wrote: »

I know of not a single 'negative' with them. It's all positive. You can make it 'behave' exactly the way an ordinary repayment would behave, or you can treat it as Interest Only, or hop on and off as you please.

The main negative is that the interest rates are higher than traditional mortgage products but this isn't a problem if you have a high enough level of savings offset. I think I needed to have £20k of savings to make my offset have the same interest payments as a traditional mortgage product (with my savings held in an ISA).

The other issue is that some offset providers insist on a repayment offset instead of the traditional IO, which seems a bit bizarre given the nature of the product.

Loughton_Monkey

MFW_ASAP wrote: »

The main negative is that the interest rates are higher than traditional mortgage products but this isn't a problem if you have a high enough level of savings offset. I think I needed to have £20k of savings to make my offset have the same interest payments as a traditional mortgage product (with my savings held in an ISA).

The other issue is that some offset providers insist on a repayment offset instead of the traditional IO, which seems a bit bizarre given the nature of the product.

I tend to note that their rates are 'similar' to others, but a glance at Frist Direct (my own provider) seemed to show rates similar to those quoted by wotsthat. There's probably always an outlying cheaper repayment somewhere....

I agree it's bizarre about the nature of the product, since by definition it allows money in and money out. Certainly First Direct insist on a Direct Debit for an agreed amount every month. But I can draw every penny of it out 30 seconds after it has gone in.

The thing about them is that the 'edge' is never going to be big on day 1, since (a) the "then" market rates for savings and loans is 'in balance', and (b) any individuals' savings are usually lower at the start of any mortgage, and only build up after time.

sheffield_lad

I have my eye on a 10yr fix with Yorkshire BS 3.89% the only reason I have not jumped yet is I still think there is time before a rate rise. I am on SVR around as similar % just want to get my full 10yrs moneys worth. lol


I wonder if I can reserve this deal?