Remortgage Nightmare

randomtom

We moved into a new house last year that we bought on a 2 year fix with Halifax at 1.99% and 80% LTV. The deal ends in March and I've spoken to a mortgage advisor this week who told me the best rate now is a 10 year fix (!) at 4.24%, except I found out today that this product has been withdrawn and everything has increased again... This is seriously starting to worry me. At the moment it's looking likely that next year we'll be paying at least £750 more per month, which is going to be a stretch with everything else going up. I have an appointment with another broker next week to get a second opinion, but right now I'm at a total loss. Do I try wait until January to see what Halifax can offer? Should I see if they'd let us pay interest only for a while until rates settle down? What about a tracker mortgage? I heard there are deals that track 0.75% above the base rate. That has to be better than the fixed deals which are currently 2-3% above the base rate anyway?

noitsnotme

randomtom said:

I heard there are deals that track 0.75% above the base rate. That has to be better than the fixed deals which are currently 2-3% above the base rate anyway?

If the base rate increases to 5 or 6% as many are predicting, that tracker is not going to look so good against a 4.24% fixed rate.

iazcac

A 4.24% fix for 10 years could be a masterstroke or leave you paying over the odds a little in a couple of years but I just can't see rate going back to 1-2%. If anyone knew exactly theyd be a billionaire.

The last 15 years were an outlier and it's going to be a tough adjustment for many. To me it's a question of certainty and how much 4.24% is bad but 6% on a tracker would be disastrous.

K_S

randomtom said:

We moved into a new house last year that we bought on a 2 year fix with Halifax at 1.99% and 80% LTV. The deal ends in March and I've spoken to a mortgage advisor this week who told me the best rate now is a 10 year fix (!) at 4.24%, except I found out today that this product has been withdrawn and everything has increased again... This is seriously starting to worry me. At the moment it's looking likely that next year we'll be paying at least £750 more per month, which is going to be a stretch with everything else going up. I have an appointment with another broker next week to get a second opinion, but right now I'm at a total loss. Do I try wait until January to see what Halifax can offer? Should I see if they'd let us pay interest only for a while until rates settle down? What about a tracker mortgage? I heard there are deals that track 0.75% above the base rate. That has to be better than the fixed deals which are currently 2-3% above the base rate anyway?

@randomtom I hate pressurising clients to make a quick decision but unfortunately over the past few months the situation has been one that any illustration that you send out to a client can expire very very quickly. 

Assuming that a fix is what you want, in your place I would get a remortgage (from a new lender) offer for the best product that I can today and then compare it to the product-switch that Halifax offers on 1 Jan. You can always decide to not go ahead with the remortgage and stick with Halifax if that works out better.

You need to balance the "best" rate with the length of time that you are comfortable fixing for.

housebuyer143

Agree with the above, if you are going to struggle to make 4.24% work, then do not go with a tracker. Very likely at some point they will exceed this and then your payments will be more unaffordable.

simon_or

You could get 4.07% on a 15 year term-fix with Kensington. Don't get fixated on the rate, all you'll do is end up locking yourself in for a very long period without accounting for your preference, future plans and the sort.

And if you are in a hurry, with a deal ending in March, don't wait for a broker who can't see you for a week, the quicker you get your application in the quicker your lock in a rate.

london21

randomtom said:

We moved into a new house last year that we bought on a 2 year fix with Halifax at 1.99% and 80% LTV. The deal ends in March and I've spoken to a mortgage advisor this week who told me the best rate now is a 10 year fix (!) at 4.24%, except I found out today that this product has been withdrawn and everything has increased again... This is seriously starting to worry me. At the moment it's looking likely that next year we'll be paying at least £750 more per month, which is going to be a stretch with everything else going up. I have an appointment with another broker next week to get a second opinion, but right now I'm at a total loss. Do I try wait until January to see what Halifax can offer? Should I see if they'd let us pay interest only for a while until rates settle down? What about a tracker mortgage? I heard there are deals that track 0.75% above the base rate. That has to be better than the fixed deals which are currently 2-3% above the base rate anyway?

10 years is such a long time, maybe 5 years might be better.

Check your affordability and what you would be comfortable with.

When you find a rate, you are happy with, make a full application to secure as rates are constantly changing.