Mortgage rate decisions

Legacy_user

Hi,

What's the opinion here for a fee free mortgage, in the current economic climate? Poll above.

2.10% 2 year fixed or the 2.39% 5 year fixed? Or neither, as I could do much better?

All suggestions welcome.

Dan

madvicker

I would go for the 5 year fix, but that is my personal preference.
For you, it depends:

- Interest rates are likely to go up in the next 5 years, but not substantially - its a risk you need to take. Low rate now for a short term with the possibility of rate rises in the future, or a slightly higher rate for a longer term with the possibility that rates don't move.
- How long are you going to live at the property? Can you port the mortgage if you move within the fixed period?
- It's impossible to see if you can get a better rate without knowing your deposit, income, employment status, credit history etc.

System

It is a risk but I think stability would be better in my situation. Who knows, these rates may have risen just so they can go back to emergency rates when we get a no deal Brexit!

It will probably be home for the next 10-15 years so no real concern there.

getmore4less

Not enough information.

Start by adding the LTV, amount borrowed, full term, rate for fee based products, the amount you can/want to pay every month.

System

Shared ownership property, new build, 85% LTV, 22 years, no fee mortgage, £223,500 loan amount.

Smellyonion

With all the uncertainty with brexit, I would fix for as long as possible.


Interest are very low still and there is only one direction they can go.


Inflation is likely to increase as production reduces in the UK following brexit. A rise in inflation will always be linked to a rise interest rates. Look at the 1980s, where mortgages cost 15% to stop people spending.

SG27

Smellyonion wrote: »

With all the uncertainty with brexit, I would fix for as long as possible.


Interest are very low still and there is only one direction they can go.


Inflation is likely to increase as production reduces in the UK following brexit. A rise in inflation will always be linked to a rise interest rates. Look at the 1980s, where mortgages cost 15% to stop people spending.

But if production is dropping then so is the economy meaning people have less money to spend so inflation falls. I would argue that the uncertainty from brexit will keep a lid on economic growth. Meaning inflation and rates stay low.

But I would still go for the 5 year fix. Im risk adverse and no one really knows what the future holds.

The reason rates have been raised is because wage rises are creeping up meaning a potential risk of wage price spiral.

Smellyonion

Thts the thing, the economy is unlikely to shrink people won't leave in droves. Itll stay static which is just as bad when production reduces. When production reduces say strawberries, for example, because European workers are capped. this reduces supply causing greater demand for goods. So your £2 strawberries become £3.

Or imports restricted, causing a finite supply, supply decreases, demand increases, inflation spirals.

I guess you might be referring to the size of the economy itself (gdp). Which is true, if the size shrinks, demand shrinks as the supply shrinks

madvicker

Smellyonion wrote: »

Thts the thing, the economy is unlikely to shrink people won't leave in droves. Itll stay static which is just as bad when production reduces. When production reduces say strawberries, for example, because European workers are capped. this reduces supply causing greater demand for goods. So your £2 strawberries become £3.

Or imports restricted, causing a finite supply, supply decreases, demand increases, inflation spirals.

I guess you might be referring to the size of the economy itself (gdp). Which is true, if the size shrinks, demand shrinks as the supply shrinks

Umm, I think you have your basic economics wrong. Demand doesn't increase because there has been a supply shock. Demand stays at the same level, particularly if as you say people don't leave. But there are fewer goods, and so the equilibrium price is higher.

Yawn

I just remortgaged with a three year fix. If forced to choose between two and five, I'd always go for five, but don't overlook any early repayment charges. Five years is a long time in the future. What if your circumstances change?

getmore4less

On a loan amount of £223,500 over 5 years often fee based product are cheaper.

Which lender is offering those rate on HTB @ 85% LTV.
What other rates do they offer with fees?