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fiveyearplan
Posts: 10,145 Forumite
Hello, I have a mortgage with Santander and my current fixed rate ends July 2022. They texted me this morning saying my new offers are ready. I've had a look and interest rates haven't gone up too much - currently on 1.39%. Their offers vary from 2 years, 5 years and 7 years. The 7 year deal is very competitive to the 2 and 5 year rates and there is no fee. What is the consensus regarding the future of interest rates. Would it be wise to lock in for 7 years? TIA!
:j :j
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Is the mortgage portable? Do you think you may want to move in the next 7 years?0
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That is a good point. I need to see if it is portable but I don't think it is. I don't plan on moving and probably wouldn't be able to get a mortgage from another lender. I'm stuck with Santander but thankfully I'm happy with them. Basically I was made redundant two weeks after moving into this house (6 years ago), so lucky my mortgage had gone through and we moved in before that!! My current self employed status and income wouldn't be mortgage worthy although my mortgage payment is comfortable within that. So, with that in mind the only way I would look to move if it was to move abroad - and we have thought about this, or downsize but we don't like that idea.
If we did decide to move within the next 7 years, we would just pay the early redemption penalty.
:j :j
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Portability isn't a guaranteed mortgage. You will need to satisfy status and affordability checks before you can port the terms of the old mortgage to the new one.I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.1
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“ If we did decide to move within the next 7 years, we would just pay the early redemption penalty”
Surprising blase’ comment, given the request for advice FYP.
I am a Mortgage Broker
You should note that this site doesn't check my status as a Mortgage Broker, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.0 -
Why miss off the important information?fiveyearplan said:Hello, I have a mortgage with Santander and my current fixed rate ends July 2022. They texted me this morning saying my new offers are ready. I've had a look and interest rates haven't gone up too much - currently on 1.39%. Their offers vary from 2 years, 5 years and 7 years. The 7 year deal is very competitive to the 2 and 5 year rates and there is no fee. What is the consensus regarding the future of interest rates. Would it be wise to lock in for 7 years? TIA!
What rates?
Amount payment and alternative rates with fees so you can work some numbers
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Thank you for your advice. I guess my biggest question is what do people think will happen to interest rates over the next 7 years. I know no-one can provide a guarantee of anything. My main priority is security so knowing what my monthly payment would be is more important than what the balance will be at the end of the term - within reason.
5 year fixed 2.04% with £999 fee that I would have to put on to the mortgage
7 year fixed 2.19% no fee
5 year fixed 2.24% no fee
I certainly didn't mean to come over as blaise - as mentioned, I would only be moving if it was abroad and that is unlikely, so at that time I would have to make the decision if the repayment fee would be worth selling up early - at most it would be £6,800. I have a lot of equity in my house.
:j :j
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Of those options personally I would choose the 7 year option. But that is just me and it obviously depends on your circumstances.1
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Thank you RelievedSheff - that is the one I am leaning towards.
:j :j
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still missing important information.
5 year fixed 2.04% with £999 fee that I would have to put on to the mortgage
7 year fixed 2.19% no fee
5 year fixed 2.24% no fee
Of the last 2 the 7y is obviously cheaper over the first 5 years.
over 5y the break even mortgage size for 2.04% £999 fee V 2.19% depends on the payment/full term)term size needed 5 £266,620 10 £180,603 15 £163,084 20 £155,571 25 £151,413 30 £148,784 IO £140,222
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7 year fix seems okay. With everything going on I think it will take a few years for us to figure out the extent of inflation from covid/lockdowns/UkraineWar. It will be nice to know that for next 7yrs you are paying £X amount.2.14% is not too bad even if after some years rates go back down to your current 1.39%Initial mortgage bal £487.5k, current £258k, target £243,750(halfway!)
Mortgage start date first week of July 2019,
Mortgage term 23yrs(end of June 2042🙇🏽♀️),Target is to pay it off in 10years(by 2030🥳).MFW#10 (2022/23 mfw#34)(2021 mfw#47)(2020 mfw#136)
£12K in 2021 #54 (in 2020 #148)
MFiT-T6#27
To save £100K in 48months start 01/07/2020 Achieved 30/05/2023 👯♀️
Am a single mom of 4.Do not wait to buy a property, Buy a property and wait. 🤓0
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