Fix is over, now what

Hughesy84

Current 1st time mortgage is fixed at 5.99%, which soon drops to 3.99%

Value - £185,000
Mortgage - £136,500

So 75% mortgage only needed

Questions I have....

• Do i switch the mortgage away from Halifax?

• How long should I fix for again with the recent drop in unemployement rate, which means it can only be a matter of time before there starts to be pressure on upping the interest rate.

• Finally is this a good deal? 2.05% fixed for 2 years, and then reverts to 4.24% after - is that a long enough fix or would financial experts suggest fixing for longer?

Thanks guys & girls :A

Hughesy84

Or there is a 5 year fix

2.84% reverting to 4.99% ??

Does anyone know what sort of "best rates" for 75% mortgages where around pre the banks going pop?

L|x

I'd like to have a crystal ball to tell me these answers too :-) as I'm in the same boat with Halifax from 4.34 will drop to 3.99 variable, and I'm looking at either Halifax or Barclays Loyalty mortgages for a 2-yr fix.

I think 2.05% for a 2-yr fix is quite good, but then it depends on what fees are involved. I'm leaning towards 2.25% 2-yr fixed Barclays with no legal and survey fees and a £499 mortgage fee OR I can stay with Halifax with no fees whatsoever at 2.64%.

As for 2 vs 5 years, you know your situation better, are you planning on moving in the next couple of years? The mortgage rates can only go up from here

L|x

ps. How did you come up with the property value?

getmore4less

Got to factor in fees to get the "real" fixed rate.

Also look at the best you can get long term trackers.

Hughesy84

getmore4less wrote: »

Got to factor in fees to get the "real" fixed rate.

Also look at the best you can get long term trackers.

Tell me more? You mean variable mortgages?

There is a santander one @ 2.49% with just a Deferred Arrangement Fee £225.00 Fixed exit fee and a Booking fee of £495. I would also get 1% cashback on my monthly payment with my 1% cashback.

Can I just fix that if things start getting expensive, or will I be tied in for abit?


As for the question about valuation - I sat with my bank/ mortgage advisor and she valued it around that. It was 185k when I moved in, and the area hasnt dropped any value, if anything, slightly higher.

Hughesy84

L|x wrote: »

I'm looking at either Halifax or Barclays Loyalty mortgages for a 2-yr fix.

I think 2.05% for a 2-yr fix is quite good, but then it depends on what fees are involved. I'm leaning towards 2.25% 2-yr fixed Barclays with no legal and survey fees and a £499 mortgage fee OR I can stay with Halifax with no fees whatsoever at 2.64%.

As for 2 vs 5 years, you know your situation better, are you planning on moving in the next couple of years? The mortgage rates can only go up from here

No need to move... we bought 4 bed as new homeowner so we wouldnt need to move unless we started a footy team

As for fees of the 2.05%

Product Fee £995; Legal £250

L|x

use this calculator for comparison, add the Halifax 2-yr rate vs your 2.05% rate, you have an option to add the fees.

moneysavingexpert.com/mortgages/compare-mortgage-rates

how about the survey fee, have you considered that, if you switch lenders? not sure if there is any other fee.

getmore4less

Variable/tracker mortgages can be a better choice than fixed with a high follow on rate.

To do comparisons I find the best/easiest way is to add the fees make the monthly payments the same and check the amount owing at a future point.

IME(I checked the above link for 2 fixed today) the MSE calculators do not give the correct results/information and you have to do further work to do the comparison properly.

The MSE ultimate calculator is full of errors,
The offset calculator is very misleading and does the calculations wrong.
None take account of the difference in monthly payments
Ditch your fixed gets very wrong answers.

Hughesy84

getmore4less wrote: »

Variable/tracker mortgages can be a better choice than fixed with a high follow on rate.

To do comparisons I find the best/easiest way is to add the fees make the monthly payments the same and check the amount owing at a future point.

Ok so ignore the calcs....

Add the fees to the total owed you mean to work out the amount owing in say 3 years?

Will variable/ trackers not be much higher than the follow rate anyway in 2/3 or 5 years time, once the interest rates start moving??

Thanks

getmore4less

Hughesy84 wrote: »

Ok so ignore the calcs....

Add the fees to the total owed you mean to work out the amount owing in say 3 years?

Will variable/ trackers not be much higher than the follow rate anyway in 2/3 or 5 years time, once the interest rates start moving??

Thanks

don't forget to make the payments the same in the calculator you use.

the goal is
1. Same starting point.
2. Same cash in.
3. What debt is left.

The follow on rates which are variable will tend to follow the rates up within a short period of a base rate rise.