5 year fixes back under 5%

MultiFuelBurner

https://amp.theguardian.com/money/2023/sep/14/uk-mortgage-war-underway-as-lender-offers-499-fixed-rate

Residential 5 years fixed at time of typing 5.11-5.15% but some hope out there.

mark55man

That's interesting - thanks for sharing

dimbo61

I believe this BTL deal at 4.99% comes with a 3% fee and low  LTV

ACG

The problem with BTLs when looking at the rates is that they come with quite hefty fees.
With BTLs the rent usually needs to be over and above the monthly repayment. Obviously that is unlikely if the rate is high, so to get around this the rates are lower but the fees are higher.

However, rates are on a downward trend which is always a positive. But one thing I noticed was that saving rates are on the increase. I have seen some companies paying 6-7%. I am not smart enough to understand the reasons for that but you cant be paying someone 7% and "selling" it for 5%. 

Maka344

ACG said:

The problem with BTLs when looking at the rates is that they come with quite hefty fees.
With BTLs the rent usually needs to be over and above the monthly repayment. Obviously that is unlikely if the rate is high, so to get around this the rates are lower but the fees are higher.

However, rates are on a downward trend which is always a positive. But one thing I noticed was that saving rates are on the increase. I have seen some companies paying 6-7%. I am not smart enough to understand the reasons for that but you cant be paying someone 7% and "selling" it for 5%. 

What do you conclude re your point about saving rates?

ACG

Every time I guessed what would happen to rates, I got it wrong. I dont really do it now. 

But I suppose the only thing I can conclude is that the money lenders bring in through these rates are probably not using it for mortgages - maybe loans or credit cards or it only forms a very small part of how they actually do bring money in. 

Altior

The theory anyway, is that lenders would like to lock in a rate over a longer horizon, if the shorter term trajectory is likely to be downward. 

If you look at cash bonds for example, you'll currently get slightly stronger rates for 1-2 years than 5. 

Many many people in my view will be locking themselves into long term rates over the market rate for their term, as the activity over the last year or so will have panicked them into locking for longer. When they weren't locking for longer to save fractions of a percent when rates were historically very low anyway. 

clueless_but_curious

As much as I would like to see rates go down, and my erroneous hunch was that they would go down as fast as they went up, Gilt rates are yet to drop 

jjmmww1

This sounds better for our remortgage next year I'd happy take a 5 year fix at 5% right now if offered currently on 2.39 till dec 2024

ACG

jjmmww1 said:

This sounds better for our remortgage next year I'd happy take a 5 year fix at 5% right now if offered currently on 2.39 till dec 2024

Its funny... October last year after the mini budget, I had a customers whose deals ends in December this year. He panicked as rates were going up by the day so we fixed him a rate at 4%, he wasnt happy but took it. We left it running in the background as we had 12 months, it was just an insurance policy.

We managed to get it down to 3.6% and he is completing on 1st October, he still has to pay £1,500 in ERCs for the sake of 60 days but he is saving around £6k on rates available now (so £4,500 better off after the ERCs). 

Hindsight! In October last year, he was not happy with 4%. Now though, most people would bite my hand off for 4%.