Mortgage Dilemma In The Current Climate

london21

dosh1 said:

I recognise there are thousands in the same or similar boat!

I am in between exchange and completing on a new house due November.

I am porting my current mortgage to the new house with the current fixed rate 1.74 until end of March next year!  This is agreed with the bank.

Now (2nd Oct) I am in  the 'within six months window' that allows me to review and change my fixed rate for a further 2/5 years which are now available online.

Of course the mortgage rates have risen to 5-6% with the current climate.

Any views and thoughts whether I should jump now and change my fixed rate or do you think I should wait?  It is difficult to know what to do.  If I wait in the hope the market calms down and the rates decrease but there is the possibility they could increase further in the coming months before end of March?

Any views or thoughts are welcome.  What a dilemma and great timing....

It is now already so high.

Maybe wait till it ends to make a decision as if you renew now, you will lose the cheap rate until March.

If you want some certainty can fix but it's now like 5/6%.

If the rate it is showing you online, is it less than 5% might be worth securing it as they will go up further in the short term. 

ElwoodBlues

You can probably agree a new fix now, without having to get tied in to it. Then if a better deal comes available (highly unlikely) you can take that instead.

dosh1

#ElwoodBlues I have just checked and you are right in that my current mortgage expires end of March and the new fixed mortgage would potentially not start until after!  I wrongly assumed if I change now it would be immediate.    The rate on offer is 4.59%

Edi81

Sorry if I’ve missed something here. 

You have exchanged on a new property and complete in November. 

You are now looking at fixing your current mortgage. Is this with the idea of porting it? If so, you would need to go through underwriting again. 

tony3619

I'm currently on 1.69% until may 2023. My best available fix is 2 years at 5.59% with early repayment charge of £780. Ive worked out my new fix could go up to 8.29% and I'll still be better of  saving more during the rest of my 1.69 fix and ride out a higher fix until hopefully they come down in a couple of years. Question is will they get as high as 8.29% by March?? (When I can get a new deal set up with a ERC) 

dosh1

Edi81 said:

Sorry if I’ve missed something here. 

You have exchanged on a new property and complete in November. 

You are now looking at fixing your current mortgage. Is this with the idea of porting it? If so, you would need to go through underwriting again. 

Porting my current mortgage to the new house.  Rate is 1.74.  Fixed rate expires end of March 2023.  Because I am now within 6 months of expiry, online I can see I have the option to chose a different fixed rate for when it expires end of March. 2023.  4.59 is the new rate.

PK_London

tony3619 said:

I'm currently on 1.69% until may 2023. My best available fix is 2 years at 5.59% with early repayment charge of £780. Ive worked out my new fix could go up to 8.29% and I'll still be better of  saving more during the rest of my 1.69 fix and ride out a higher fix until hopefully they come down in a couple of years. Question is will they get as high as 8.29% by March?? (When I can get a new deal set up with a ERC) 

Enjoy the 7 more months of the cheap rate and avoid the ERC. Overpay what you can. It would only be wise to lock in another 2yrs if you were at the very end of the cheap fix. Mortgage rates are normally only 1.5 or so above base rates so even if the base rates do rise over the next few months, mortgage rates themselves will probably not rise much more than from where they are now. It would be better to ride out 7months at 1.69% and then hop onto a new 2yr fix which might be 6-7% at the time

[Deleted User]

housebuyer143 said:

tony3619 said:

PK_London said:

My general opinion is that if you can manage to lock in a 2yr fix@5% or below - and can afford it - that's probably as good as you're likely to get in this climate however if you can't then you're probably better off riding the tracker rollercoaster.

So you wouldnt fix at say 5.59% over 2 years?  Surely rates are only going up? 

In the short term for certain. Long term they could just as easily come down. 
1, tracker rollercoaster rider here 😆

Realistically, with the government we have the chances of them going down are slim in they next two years. We have two years to the next election and they will try to cling on. Maybe another new PM, maybe just more learning on the job, but extremely unlikely to provide the stability and growth needed to get interest rates down.

Fixing until the next election, two years out at most, is probably the best thing to do. If rates fall it's annoying, if rates rise you could lose your home and the government has made is very clear that no help is coming for you.

dosh1

Is there a standard answer or is this dependent on the bank/building society?

I am in between exchange and completing on a new build.  Completion should happen by end of November.  I already have agreement from the bank in relation to porting my mortgage from current house to new house.

My fixed rate mortgage expires end of March and I am now able to change the fixed rate to a different deal which will be effective from 1st April 2023 when the current one expires.

Am I able to progress a new fixed rate deal whilst I am waiting to complete on buying my new house or must I complete this before applying for a new fixed rate deal which will be effective 1st April next year?