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MSE News: What's happening to mortgage rates following the mini-budget reversal – MSE's analysis

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  • lmitchell
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    Markets now pricing bank rate peak at 4.8% next year. I still think it'll be nearer 4% personally - maybe 4.25% (0.75% rise in Nov & Dec and 0.5% rise in early 23).
  • leypt1
    leypt1 Posts: 170 Forumite
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    I'm an existing halifax customer on a 2 year fix at 1.3%, due to end next September (our LTV is 68%)
    We called up earlier in the month to ask about early exit and have reserved a switch rate of 4.37% 
    switching would entail a repayment charge of £3400 and an increase in monthly repayments of £500 each and every month

    I was told on the phone just now that we need to confirm and pay the charge today in order to make the switch next month....otherwise the whole deal collapses and we're subject to whatever the new rate is from 1 November onwards

    they only change the remortgage/switch rate twice per month so I have no idea what it will be on 1 November and whether it'll be higher or lower than 4.37%

    I'd planned to call back every day until the 28th (which is what it says my deadline was supposed to be in the email I got) to see whether rates seem to be going up to down

    I don't mind saying I cried over the phone when I found out I need to decide today
    I'm completely furious at Halifax who have made sure that we have as little breathing space as possible to decide (less than other banks)
    - deal must start from the next month or it collapses - no lead in period of 3-6 months, as per a new policy that they've apparently brought in specially
    -can't add ERC to the balance of the new mortgage, must pay it upfront
    - rates only updated at the beginning of the month, meaning my only choices are to fix for 5 years now, or hold my breath and see what the new rate is on 1 November

    I really don't want to have to pay an extra £500 every month knowing I could have got a lower rate, but I'm terrified the new rates will be higher

    What should I do?
  • JMA74
    JMA74 Posts: 264 Forumite
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    Rates being updated each month is a lot better than rates being updated every day.  At least you get a few weeks to think about your option.  

    You can get a lead in of 3 months with Halifax but only if you switch 3 months before the end of your deal.   If you want to pay the ERC to ditch your current deal and take a new one then that takes effect immediately.  If you want the 6 month lead in then remortgage to a new lender

    Cant add ERC to balance - same as 99% of other lenders.  Can add it to the balance if you switch lenders through a remortgage.

    Halifax actually have a much better process than most lenders.  You say that you reserved this rate a few weeks ago and have been told you need to decide by today to secure it.  How is this unfair?  Most lenders would have only give you the day you reserve it to actually secure the rate. 

    A lot of people are in this position unfortunately. A lot of my own clients are waiting for 1st Nov, others have gone early thinking that Halifax havent priced in increases that have hit new business due to the fact they only change the rates once a month.   Compare the existing customer deals that Halifax are offering with the new business deals and you will see that they are definitely not being unfair by any stretch of the imagination  
    I am a Mortgage Adviser 
    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.
  • leypt1
    leypt1 Posts: 170 Forumite
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    JMA74 said:
    Rates being updated each month is a lot better than rates being updated every day.  At least you get a few weeks to think about your option.  

    You can get a lead in of 3 months with Halifax but only if you switch 3 months before the end of your deal.   If you want to pay the ERC to ditch your current deal and take a new one then that takes effect immediately.  If you want the 6 month lead in then remortgage to a new lender

    Cant add ERC to balance - same as 99% of other lenders.  Can add it to the balance if you switch lenders through a remortgage.

    Halifax actually have a much better process than most lenders.  You say that you reserved this rate a few weeks ago and have been told you need to decide by today to secure it.  How is this unfair?  Most lenders would have only give you the day you reserve it to actually secure the rate. 

    A lot of people are in this position unfortunately. A lot of my own clients are waiting for 1st Nov, others have gone early thinking that Halifax havent priced in increases that have hit new business due to the fact they only change the rates once a month.   Compare the existing customer deals that Halifax are offering with the new business deals and you will see that they are definitely not being unfair by any stretch of the imagination  
    but why no cooling off period? If I'd called to make the switch today I'd only have the day to think about it if I wanted the switch to register in time for 1 November - no takebacks, no refunds, no breathing space. I only have this "benefit" because I happened to call earlier in the month, and because I happened to identify a loophole - the advisers said nothing about being able to wait until the end of the month and the expectation was to sign the same day

    It's unfair because according to the adviser, the policy to *not* offer a lead-in time is a brand new one - during our phone call he went away and checked it specifically because it was new and he was unsure of the wording and of whether there were any loopholes that might actually help us

    the fact that a lot of people are in this position doesn't help me
  • housebuyer143
    housebuyer143 Posts: 3,520 Forumite
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    edited 25 October 2022 at 4:08PM
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    leypt1 said:
    JMA74 said:
    Rates being updated each month is a lot better than rates being updated every day.  At least you get a few weeks to think about your option.  

    You can get a lead in of 3 months with Halifax but only if you switch 3 months before the end of your deal.   If you want to pay the ERC to ditch your current deal and take a new one then that takes effect immediately.  If you want the 6 month lead in then remortgage to a new lender

    Cant add ERC to balance - same as 99% of other lenders.  Can add it to the balance if you switch lenders through a remortgage.

    Halifax actually have a much better process than most lenders.  You say that you reserved this rate a few weeks ago and have been told you need to decide by today to secure it.  How is this unfair?  Most lenders would have only give you the day you reserve it to actually secure the rate. 

    A lot of people are in this position unfortunately. A lot of my own clients are waiting for 1st Nov, others have gone early thinking that Halifax havent priced in increases that have hit new business due to the fact they only change the rates once a month.   Compare the existing customer deals that Halifax are offering with the new business deals and you will see that they are definitely not being unfair by any stretch of the imagination  
    but why no cooling off period? If I'd called to make the switch today I'd only have the day to think about it if I wanted the switch to register in time for 1 November - no takebacks, no refunds, no breathing space. I only have this "benefit" because I happened to call earlier in the month, and because I happened to identify a loophole - the advisers said nothing about being able to wait until the end of the month and the expectation was to sign the same day

    It's unfair because according to the adviser, the policy to *not* offer a lead-in time is a brand new one - during our phone call he went away and checked it specifically because it was new and he was unsure of the wording and of whether there were any loopholes that might actually help us

    the fact that a lot of people are in this position doesn't help me
    There's no difference to a normal product switch where you pick the product and you switch straight away. If you want time to think about it, Just think about it before you decide to do it?

  • JMA74
    JMA74 Posts: 264 Forumite
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    The new policy as far as I'm aware was allowing an ERC to be paid to a mortgage account and then arrange a switch straight away.  Previously you would have to wait until the start of the following month to revert on to standard variable rate and then select a new rate at that point to start the following month

    You can have a cooling off period but if you want the new deal to start before this period is up then you have to waive the cooling off period. 

    With normal product transfers with Halifax you would be able to cancel the switch within 28 days of it taking effect.  This would involve reversing the transaction and putting you back on the standard variable rate.  This bit may still apply but it wouldn't allow you to go back to your fixed rate and get your ERC back.  

    You are going from:

    Fixed Rate -> Pay ERC -> Standard Variable Rate -> New fixed rate

    If you wanted to cancel the New fixed rate you would end up back on the standard variable rate, not right back at the start.  

    If this doesnt apply it will be because the lender doesnt want the be cancelling and setting up new deals every day for people.  You will still have your original cooling off period though (which you waive if you want it to start immediately) 
    I am a Mortgage Adviser 
    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.
  • K_S
    K_S Posts: 6,764 Forumite
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    Santander reducing some rates as well

    I am a Mortgage Adviser - 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.

  • PK_London
    PK_London Posts: 106 Forumite
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    leypt1 said:
    I'm an existing halifax customer on a 2 year fix at 1.3%, due to end next September (our LTV is 68%)
    We called up earlier in the month to ask about early exit and have reserved a switch rate of 4.37% 
    switching would entail a repayment charge of £3400 and an increase in monthly repayments of £500 each and every month

    I was told on the phone just now that we need to confirm and pay the charge today in order to make the switch next month....otherwise the whole deal collapses and we're subject to whatever the new rate is from 1 November onwards

    they only change the remortgage/switch rate twice per month so I have no idea what it will be on 1 November and whether it'll be higher or lower than 4.37%

    I'd planned to call back every day until the 28th (which is what it says my deadline was supposed to be in the email I got) to see whether rates seem to be going up to down

    I don't mind saying I cried over the phone when I found out I need to decide today
    I'm completely furious at Halifax who have made sure that we have as little breathing space as possible to decide (less than other banks)
    - deal must start from the next month or it collapses - no lead in period of 3-6 months, as per a new policy that they've apparently brought in specially
    -can't add ERC to the balance of the new mortgage, must pay it upfront
    - rates only updated at the beginning of the month, meaning my only choices are to fix for 5 years now, or hold my breath and see what the new rate is on 1 November

    I really don't want to have to pay an extra £500 every month knowing I could have got a lower rate, but I'm terrified the new rates will be higher

    What should I do?
    That's an awful situation to be in. First of all, if you don't have £3,400 for the ERC and £500 a month knocking around then it would be ill advisable to proceed. 4.37% is a good but not great rate. unless you have a monster sized mortgage. 11 months of £500 is £5,500. Add the ERC £3,400 and that's £8,900 extra in the space of 12 months. 

    Im not an expert but that's a big chunk of change. You could use that money to overpay your mortgage to bring your payments down. You could continue as you are, make cut back, improve your work situation etc and be prepared for higher rates next year. I dont think they will be much higher - if as high - as they currently are. Obviously is you have a massive mortgage debt then it may be worth switching now but at face value I'd say hold tight to what you have and deal with September when September comes.
  • Martisha
    Martisha Posts: 106 Forumite
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    Does anyone know if Nationwide is going to reduce their rates?

    we applied for 5 year fix 5.39% 
  • ElwoodBlues
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    leypt1 said:
    I'm an existing halifax customer on a 2 year fix at 1.3%, due to end next September (our LTV is 68%)
    We called up earlier in the month to ask about early exit and have reserved a switch rate of 4.37% 
    switching would entail a repayment charge of £3400 and an increase in monthly repayments of £500 each and every month

    I was told on the phone just now that we need to confirm and pay the charge today in order to make the switch next month....otherwise the whole deal collapses and we're subject to whatever the new rate is from 1 November onwards

    they only change the remortgage/switch rate twice per month so I have no idea what it will be on 1 November and whether it'll be higher or lower than 4.37%

    I'd planned to call back every day until the 28th (which is what it says my deadline was supposed to be in the email I got) to see whether rates seem to be going up to down

    I don't mind saying I cried over the phone when I found out I need to decide today
    I'm completely furious at Halifax who have made sure that we have as little breathing space as possible to decide (less than other banks)
    - deal must start from the next month or it collapses - no lead in period of 3-6 months, as per a new policy that they've apparently brought in specially
    -can't add ERC to the balance of the new mortgage, must pay it upfront
    - rates only updated at the beginning of the month, meaning my only choices are to fix for 5 years now, or hold my breath and see what the new rate is on 1 November

    I really don't want to have to pay an extra £500 every month knowing I could have got a lower rate, but I'm terrified the new rates will be higher

    What should I do?
    Personally, I'd stick in that situation. Use the remaining year at 1.3% to overpay as much as you can in that time. In a years time you are going to end up on a higher rate than you currently are, but it's unlikely to be massively worse than 4.37 in my opinion.
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