Residential remortgauge - do I go long-term?

steamengineer

Hi,

Bought my first house about 18mths ago, currently on a 2 year fix at 3.79% with Barclays, which expires around August (and I presume will revert to their SVR).

House (scruffy ex-council 3 bed, in north Derbyshire) was £90k, I put down 18K, giving me 80% LTV. Actual amount borrowed (inc fees etc) was about £73k.

Obviously as the fix is drawing to a close, I'm eyeing up options for where to go next. I've overpaid a bit on the current mortgage (not massively), but if I round up a bit of spare cash (I've a classic car I intend to sell, worth around £3K), I would hope to be able to push the remaining mortgage below £67.5k (i.e. 75% LTV).

I tend to the view that rates are likely to go up in the not too distant future, and unlikely to go down, so I'm looking at a longish term fix. A quick search suggests I would be looking at about 3% on a 5 year fix (loads of options at similar rates - because my loan is fairly small, it probably comes down mainly to the fees), or there are 10 year fixes, the best of which looks like it's from Yorkshire BS, at 4.14% (and with what appear to be very low fees compared to most lenders -they want £130, most of the 5 year fixes have £1000-1500 or so stuck on them!).

My income history is consistent and stable, although not massive - I earn about £21k pa, and have been in work continuously for about 8 years (i.e. since I was about 19 - I'm 27 in two weeks time). I'm single, decent credit history, no other debts, no missed payments etc etc.

Two questions really,

1) Are there any obvious drawbacks (apart from it costing me a bit more in the short term at least) to going with a ten year fix? (And/or with the particular YBS product I mention). I've no plans to move any time soon (although lacking a crystal ball, who knows where or what I'll be doing in ten years time!)

2) What's the deal with surveys/valuations at re-mortgage?
I don't think the house's value has changed significantly since I bought it, however as I'm going to be close to the edge of a LTV bracket, I don't want to have the place marked down by £5k, and lose out on decent rates until I've paid off another £3 or 4k. It's also not particularly presentable at present - I'm very slowly (DIY'ed in my spare time round a pretty all consuming job) doing a lot of essential work (e.g. full rewire, as it wasn't far from catching fire when I moved in - 1960s cables in metal conduit, with the insulation falling off in chunks), redecoration in several rooms etc etc, so it might not look very appealing to a valuer (even if in practice it's already in far better shape than when I bought it).
Do re-mortgages (particularly after just 2 years from a purchase, with a valuation) routinely re-value, or is the previous valuation usually deemed good enough?

Elfbert

I can tell you that I'm remortgaging right now, having bought my property 2yrs ago, and the valuation guy is visiting on Tuesday.

I'm moving from HSBC to Nationwide.

I *think* if I'd stayed with HSBC they might not have bothered sending anyone round, as they clearly know the property exists from last time, and may have taken a rough valuation from other 'sold' properties - I can't be certain of that though.

So they definitely *could* send someone to revalue.

(Also I'm in London, and 2 yrs probably represents quite a massive change in value on my property. Perhaps they treat properties elsewhere differently.)

Yorkie1

Have many similar houses sold near to you recently? That may be a good guide as to what value the lender puts on your property.

El_Torro

I bought a place in 2010 and got a 10 year fixed rate then cos I thought that interest rates were bound to go up soon. It hasn't been a particularly wise investment so far!

For what it's worth though if I were getting a mortgage now I'd definitely consider a 10 year fixed rate at 4.14%. Interest rates are expected to go up in the next year or two, let's not forget that the long term average is about 5% as well.

If you like stability and knowing exactly what you're going to pay each month for the next 10 years then it may be your best option. If you're more adventurous and your budget can stretch to paying more when interest rates go up then a good value tracker might be better for you.

Triolette

Santander are doing five year fix without fees.
The rate is a wee bit higher than five years with fees. But we were borrowing less than £90k so in real terms it's not much.

megansden

My daughter and partner have split, they have a 4 year old, my daughter lives in the house and her partner is living with his parents. Daughter wants to get mortgage on her own, she earns 30K and there is a 128k mortgage, anybody got any idea how she could take over the mortgage earning what she does, with access to her 4 year old it seems that partner is trying to dictate when he should have him, they are trying to all neccessary things without CSA involvment ????