Question about % rate

Anzhelka

Hi everyone
If we have been offered 4% interest rate on our mortgage, does it mean that it's a higher rate then normal ?
as also why our broker didn't go through high street bank? is he seeing more possibility to get our mortgage approved by building society with higher rate? as he seems to be pretty much confident that we will get approved. Mortgage advisors advise on this would be grateful.
Thanks

AnotherJoe

Anzhelka wrote: »

Hi everyone
If we have been offered 4% interest rate on our mortgage, does it mean that it's a higher rate then normal ?
as also why our broker didn't go through high street bank? is he seeing more possibility to get our mortgage approved by building society with higher rate? as he seems to be pretty much confident that we will get approved. Mortgage advisors advise on this would be grateful.
Thanks

Impossible to know without knowing how much you are looking to borrow on a house valued at how much, what you are earning, what your outgoings are, etc.

You are asking people to double guess your mortgage adviser based on zero information.

Anzhelka

sorry didn't know that % rate depends on that information, as we are first time buyers.
house valuation is in process....marketed value is 170k, however we are buying only 35% share which costs 60k and we earn about 30k a year. we have only 5% deposit.

Anzhelka

regarding outgoings....we have around 1000 left every month after paying all bills and etc.

AnotherJoe

Anzhelka wrote: »

sorry didn't know that % rate depends on that information, as we are first time buyers.
house valuation is in process....marketed value is 170k, however we are buying only 35% share which costs 60k and we earn about 30k a year. we have only 5% deposit.

Yes, the rate you get depends on the proportion of how much you are borrowing compared to the value of the house.
The higher the proportion of your loan to the value of the house is, the riskier the loan is.

In your case I'd be confident the 5% deposit will be the issue (especially as its only 5% of 35%. )

If you could get an extra 5% deposit you might find mortgage rate dropped substantially. So dont lock in for a long time, if you do just a 2 year fix then if your house rises in value you might be able to remortgage at a lower rate in a couple of years time unlike this person who fixed for 4 years and is now faced with a big lump sum repayment to get out of the deal and onto lower rates.
https://forums.moneysavingexpert.com/discussion/5453513

Is it actually worth you just buying 35%? Dont you also have to pay rent on the other 65%?

kingstreet

The going rate for newbuild shared ownership with only 5% deposit is between 4% and 5.5%.

Anzhelka

AnotherJoe, Thanks for explanation. I know these amounts sounds silly, but we have no choice, our landlord urgently said that is selling our current house but we haven't found anything to rent yet, so we are trying to get this shared ownership. it will only cost us around £500 a month. (mortgage £300 and £200 rent). However rented properties are £750 p/m and up. Our monthly affordability is absolutely fine, the only thing is that we haven't prepared to pay deposit, so the only savings we have at the moment are those 5%. And yes it's only 2 years fixes rate, so we are planning re-mortgage and stair casing in the future, I am sure after 2 years we will save more to buy the rest of the house, either then now, when it was completely unexpected situation.