ERC, Mortgage & Brexit.

Mrsh4715

Hi All.
We're our current fixed rate mortgage ends in August.
I'm considering remortgaging before this & Brexit to ensure we're on a fixed low rate if it all goes wrong when/if we leave the EU.
I know nobody knows what's going to happen, but what's the general consensus? Would you pay the ERC & lock in a lower fixed rate. The ERC is around the £500 mark. Or wait & see?
Even if we do leave, do we think much is going to happen in the first few months post Brexit?
A lot of what ifs I know, but grateful for opinions & advice.
Many thanks!

ACG

A lot will depend on you.
If rates do go up, would you manage or would you be in the proverbial?

Is it just a money saving exercise or do you have real concerns about being able to pay the mortgage? If it is the latter, it is worth looking in to. If it is the former then I think personally (not professionally) I would wait and see.

spadoosh

I cant see interest rates changing that much at all (1/4 per cent either way). I can see lenders tightening up on their lending criteria.

The plan was to keep increasing interest rates slowly. Inflation has lowered since then which suggest the previous increase mightve been a bit early. It seems apparent the economy will slow throughout this year and when that happens the BofE tend to err towards rate drops as opposed to increases.

As a consequence of that id expect to see lenders dry up a bit. If youre in a good position in terms of LTV and affordability then it shouldnt be a problem. If theres high LTV, HTB schemse being used and top end borrowing you might find less products available and therefore potential for a higher rate.

Of course this is only my opinion and its worth is what youve paid for it.

If your renewal date is in august you can start applying several months before which will reduce the time for an interest rate rises to take place.

The BofE have 3 'interest rate' meetings penned in before august. 21st March, 2nd May and 20th june.

foxy-stoat

How much is the Early Repayment Charge going to be?

Crunch the numbers to see if it works for you.

I do not think you should base your decision to switch lenders purely because of brexshit.....as I doubt as soon as/if we leave the EU all the money will disappear and lenders making massive rises in interest rates...I would think they would do the opposite, keep them where they are.

Thrugelmir

Brexit or no Brexit in the longer term interest rates are going to rise. These are still abnormal times. A decade may have passed since the GFC but the policies of the Central Banks , amongst other issues, are yet to be unwound. Very much unchartered waters lying ahead.

Best to make decisions based on your personal circumstances rather than events totally outside of your control. Some of which you won't even be aware of yet,