MSE Mortgage best-buy comparison out of date?

smipsy

Hi all,

Like many out there, I am in the market to buy a house. I'm on 40k a year (with a bit of extra from partner's part time work). I will be buying around the 180k mark and have a 90k deposit (so 50% LTV). If I use the MSE best-buy comparison I get 2/3 year fixed rates generally around the 2% mark, even some from Staffordshire Railway Society which offer like 2.1% for a lifetime mortgage (but I assume there's some kind of a catch there) 

However, when I use the rate calculator on the major banks, they all quote around 4% for 60% LTV? So I'm assuming that MSE is out of date, or I am missing something obvious out there? Many thanks for any clarification!

K_S

smipsy said:

Hi all,

Like many out there, I am in the market to buy a house. I'm on 40k a year (with a bit of extra from partner's part time work). I will be buying around the 180k mark and have a 90k deposit (so 50% LTV). If I use the MSE best-buy comparison I get 2/3 year fixed rates generally around the 2% mark, even some from Staffordshire Railway Society which offer like 2.1% for a lifetime mortgage (but I assume there's some kind of a catch there) 

However, when I use the rate calculator on the major banks, they all quote around 4% for 60% LTV? So I'm assuming that MSE is out of date, or I am missing something obvious out there? Many thanks for any clarification!

@smipsy The SRBS rates quoted are discounted-variable rates, not fixed.

To filter for only fixed rates, use this filter on the MSE comparison tool. If you click on the ? icon beside 'Mortgage type', it explains what a discounted variable is.

smipsy

I did have a read through that, but for example some of the mortgages will say things like "Initial rate 1.99% for 24 months" or "Initial rate 2.09% for 300 months", so how they can say that the rate will last for that long, if it can change in that period?

dimbo61

Somewhere in the discounted variable rate deal it will say based on BOE base rate tracker.
With a 0.5% if not a 0.75% increase due next Thursday rates will be going up with almost every lender real soon.
Perhaps a long term fix ?

K_S

smipsy said:

I did have a read through that, but for example some of the mortgages will say things like "Initial rate 1.99% for 24 months" or "Initial rate 2.09% for 300 months", so how they can say that the rate will last for that long, if it can change in that period?

@smipsy While the blurb might appear that way, a discount variable is not guaranteed to last for the initial period, it can vary upwards/downwards in line with the building society's SVR.

This is what an SRBS illustration would say about a 2.24% 2yr discount rate -

ACG

If it is a lifetime tracker, they can only give you the rate it is today. Who knows what it will be next week. If the bank of england base rate goes up, then chances are so will the variable rate mortgages. Although interestingly at the moment, not all building societies are passing on the rate rises in full. 

I know of at least 2 who have not passed on all of the rate rises - the 2 of them have passed on around 70% of the rate rises.

K_S

dimbo61 said:

Somewhere in the discounted variable rate deal it will say based on BOE base rate tracker.
With a 0.5% if not a 0.75% increase due next Thursday rates will be going up with almost every lender real soon.
Perhaps a long term fix ?

@dimbo61 If it tracks the BOE rate, the product will usually be termed a Tracker.

Discounted variable rates are tied to the individual lender's SVR and this may or may not vary in line with changes in the BOE rate. In some cases the flexibility works in your favour (most BS SVRs haven't passed on the whole BoE rate hikes through) and in some cases they may not.

As an example, see the email below from a BS advertising their discount rates.

ACG

K_S said:

dimbo61 said:

Somewhere in the discounted variable rate deal it will say based on BOE base rate tracker.
With a 0.5% if not a 0.75% increase due next Thursday rates will be going up with almost every lender real soon.
Perhaps a long term fix ?

@dimbo61 If it tracks the BOE rate, the product will usually be termed a Tracker.

Discounted variable rates are tied to the individual lender's SVR and this may or may not vary in line with changes in the BOE rate. In some cases the flexibility works in your favour (most BS SVRs haven't passed on the whole BoE rate hikes through) and in some cases they may not.

As an example, see the email below from a BS advertising their discount rates.

I love it when we both post things at around the same time and we say the same things (in different ways). It makes me feel like I know what I am doing and have some validation