mortgage interest

spezial

What is the lowest interest rate I can maintain for 10-15 years mortgage? Afaik, there is no constant interest rate for so long, but is there any better approach? Ie, can I move my mortgage to different banks in order to take advantage of their offers? Please advise me on this.

kingstreet

spezial wrote: »

can I move my mortgage to different banks in order to take advantage of their offers? Please advise me on this.

Yes. It's called a remortgage.

Make sure you take into account the costs of moving the mortgage from one lender to another as chasing a rate which ends up being more expensive due to the one-off costs involved would be an obvious mistake.

csgohan4

kingstreet wrote: »

Yes. It's called a remortgage.

Make sure you take into account the costs of moving the mortgage from one lender to another as chasing a rate which ends up being more expensive due to the one-off costs involved would be an obvious mistake.

The MSE mortgage calculator is a good tool to compare mortgages

spezial

is there any catch?
eg do they force you to stay for some months, or I can change as often as I like? and take advantage the lowest rate of the non fee offers?

Foxy-Stoat_3

Errrrr you take out a fixed rate mortgage for 2,3,4,5 or even 10 years and look at the market rates when the term finishes. You will get charged if you end the fixed rate early.

Noone can know what the mortgage market will do in 1-10 years time but people can best guess.

When you apply for a mortgage via a broker or direct to a high street bank or whatever, they will go through the options of the different rates and lengths of terms and source the right mortgage for you, that they can offer.

spezial

I see now 1.8%-2.5% rates until 2018-2020 and then the rates goes to 5.5%

can I stay until 2018-2020 or they will force me to stay for a significant period with the 5.5% ?

pathtofreedom

They can't force you to stay if you have a way to pay it off. Be that lottery winnings in cash, or a mortgage from someone else. However you need to check for early repayment charges which can be in the thousands especially for fixed deals, which mean to move early it will cost you so much it isn't worth moving.

There can also be arrangement fees for mortgages as well as needing a new valuation each time, and solicitors fees, so even if you got a new mortgage deal that had no setup fees it can still cost a few hundred or more to get a new deal even with no early repayment charge. I think if you stay with the same bank and just change products you might be able to cut some of those costs down, but again it depends on the bank.

You also have to be wary of negative equity as if you get stuck in that then you won't be able to remortgage as you'd be left with the difference to still find to get you back to the point of having some equity in the property. Also each time you remortgage you'd need to go through the credit checks, affordability checks etc, so if you have kids or change jobs or are sick and can't work again you might not be able to remortgage.

Foxy-Stoat_3

You just fix a new deal after the first deal finishes, but as no one knows what the market rates will do 2/3/4/5 years in the future no one will be able to say what rate the SVR will be or the cheapest fixed rate deal will be.

spezial

thanks but you don't answer me what's the typical number of years to stay with a mortgage, for example can you move every 2-3 years and take advantage all the introductory offers (eg very low interest for the first 2 years) ? or it depends and that cannot be answered?

also, what other costs are involved, I thought it was only the mortgage fee from the bank???

Foxy-Stoat_3

spezial wrote: »

thanks but you don't answer me what's the typical number of years to stay with a mortgage, for example can you move every 2-3 years and take advantage all the introductory offers (eg very low interest for the first 2 years) ? or it depends and that cannot be answered?

also, what other costs are involved, I thought it was only the mortgage fee from the bank???

You choose the number of years to fix your rate, you can leave when the fixed rate ends or re-fix with the same lender.

Some customer retention products are fee free, free legals, free valuations, if your changing lenders you need to ask them if application fees, legals and valautions are free or not.

Some have a slightly lower rate with a fee, you need to crunch the numbers to see if its worth paying the fee for a lower rate.

kingstreet

Foxy-Stoat wrote: »

if your changing lenders you need to ask them if application fees, legals and valautions are free or not.

Tsk tsk, you'll have Landofwood after you.