5 Year Fixed Deal

JonnySpandex

We're in process of getting a mortgage (provider, Halifax has approved credit check, they're just waiting on payslips and valuation) but their rate is 4.69%. I've found fixed rates at like 3/74% which is obviously quite a bit cheaper, but the % Halifax reverts to after that period is better than the initial fixed (a lot of the lower rates go up to like 5%, Halifax goes to 3.99%).

My question is can you swap at the end of the 5 year? I don't want to end 5 years of higher rate and drop to a lower % when I'll just be able to change at the end anyway.

Secondly we've already progressed the mortgage to the point we've paid the fees and they've checked us out which means they're now going to be a search on our credit history. IF it means after 5 years we can switch out I want to be able to go elsewhere but will the search have damaged my rating thus the mortgage I could get? Would I be able to borrow less as my rating would need to be better for better rates (like a credit card)?

Or should I just take it at the minute that I've got the mortgage and be happy with that (with how difficult it can be!)?

Sorry for all the questions but I'm a first time buyer!

JonnySpandex

Also a First Direct mortgage is better for the 5 year and revert % anyway!

amnblog

Are you a first time buyer?


Who else is offering 1% cash-back?

betmunch

Why did you apply to Halifax if you knew there were better deals about?

JonnySpandex

I didn't (wife didn't search well), but kind of not the point at this point really betmunch. Valuable contribution.

No one is offering cashback from what I can see but that relates to £1400 whereas over the duration of the 5 year fixed we'd pay £100 a month less which is £6000 over the 5 years!

kingstreet

JonnySpandex wrote: »

will the search have damaged my rating thus the mortgage I could get? Would I be able to borrow less as my rating would need to be better for better rates (like a credit card)?

No-one here can say. We don't know how strong your application was in the first place to be able to say if it will be weakened to the point of decline by a search having been done.

HSBC is at the top end of the picky lenders with lowish affordability, so if you need a more generous lender with better underwriting flexibility Halifax is it.

betmunch

JonnySpandex wrote: »

I didn't (wife didn't search well), but kind of not the point at this point really betmunch. Valuable contribution.

it is an important point. Halifax are a lot easier to get a mortgage offer out of than First Direct who have a reputation as one of the most picky lenders out there.

I'll just end my line of questioning here though

JonnySpandex

Thanks for the reply. It's one of those situations where I don't want to pay over the odds but also there's every possibility I might not get it anywhere else! HSBC would only lend us £10,000 less than what Halifax have done.

kingstreet

Are you going to take £10k less to get the better rate then?

JonnySpandex

Can't remember if it was better rate or not at the lower value, the max they'd lend was 10k less is what I remember

PixelPound

You can swap your mortgage at any point, but there can be a penalty for doing so. If you are going for 5 year fix, then you are able to swap after the fix, if you do it before you will trigger an Early Repayment Charge to be able to move the mortgage.