Mortgage - fixed rate for a whole term

JohnBravo

Should I myself book interviews with the lenders in case the broker is not going to beat the price?

JohnBravo

I have checked and the ERC for this product is between 2-5%. Considering the loan amount is not big, cost of 3% on the remaining loan is not a big deal I would just have to change it from 20 to 15 years term as for 20 years term one I would have to wait 11 years to get 3% otherwise 4%.

But I am still thinking about 15-20 years term 7-10 year fixed term. I think 7 year is more suitable as 3% is available after 5 years while on the 10 year fixed rate it's 8 years. For the term length it does not matter much. I think for expensive properties you aim for longer term while I could be on 15 year one.

I think in both cases the difference between 15-20 years term and 7-10 years fixed rate are cosmetic differences - it could turn out crucial in 7 years but I don't have a crystal ball.

My intended stay at the property is definitely over 6 years considering how long I rent the same property so I think 8-10 years is reasonable assumption for a property I own, not a flat but a house if it makes a difference (I think it does).

Saying that 10 year fixed rate seems more reasonable if I stay 8+ years but this could also be beneficial if the economy is going to be the repeat of the 70ties and it will take over a decade for the economy to sort itself out. If I decide to sell the property sooner I will have to absorb the 4% ERC.

I think I found the sweet spot - 20yrs term 10yrs fixed rate.

If I submit an application can I change the term length or start from scratch?

getmore4less

there are some decent 10y rates with 5y ERC,
Effectively a 5y fix(for a bit more) with a option to keep for a further  5.

Call it wrong you switch penalty free call it right you can look smug.

JohnBravo

getmore4less said:

there are some decent 10y rates with 5y ERC,
Effectively a 5y fix(for a bit more) with a option to keep for a further  5.

Call it wrong you switch penalty free call it right you can look smug.

what lender is that?

getmore4less

Coventry were up there with decent rates last year.
Not looked recently they may have pulled 10y deals

JohnBravo

Right

Do you pay attention to the variable rate after the initial fixed rate period?
Considering this is going to change anyway in 10 years.

The two I am looking at the moment one is 4.49% and the second is 5.54%. Is this going to grow or reduce proportionally?

I think the broker will not be able to handle the 4.49% deal for me as I see the lender allows only for a couple of brokers.

How much of a dent on the mortgage cost would you expect to go for a broker?

What the broker is offering is only 0.01% cheaper to my deal.
I went for no initial fee so it reflected on the rate it rose to 2.47% but with a fee it is only 0.01% more expensive.
On the other hand my lender's APRC is 3.0%, broker's is 3.2% considering both have a  £995 initial fee so I don't see any savings.