Remortgaging advice

Code974

Hi Guys and Girls

Hoping someone can give me a little advice here.

I currently have 2 mortgages with the same lendor due to upsizing 4 months ago whilst still in a fixed rate period with the first mortgage.

The second mortgage i deliberately got without an early redemption penalty so that it opened up my options when the first fixed term was up.
This fixed term period is now up and this month I will be paying the higher rate on my first mortgage.

Now, although I have been looking around for a new mortgage, after having read these forums I have noted that the BoE will be "hopefully" decreasing the rates another 1/4% on the 10th Jan 2008. How long after this announcement would the lendors make their changes usually? Is it worth me waiting to see what the announcement is before comitting to a new mortgage?

Finally, what would be good to comit to with the remortgage? 2 years fixed? more? or something else?

Thanks for your time in reading and responding to this.

All the best

Tony

vishy01234

Hi Tony,

I am in a similar position to you. I remortgaged one of my properties recently, and my second property is due for remortgage at the end of this March and I am not too sure whether I should take the wait and see approach or just go with the best deal available right now, which is a good one, in case credit markets freeze up again and borrowing becomes even more difficult.

Advice from people on this forum would also be greatly appreciated.

All the best,
Vishy

herbiesjp

Hi Tony

Tracker rates would change pretty much straight away

Fixed rates may change, but the again they are not directly linked to BoE rate changes, but instead the money markets - so these rates tend to be more influenced by swap rates over various timescales (sorry for the jargon)

However if your deal has come to an end you need to move quickly, to find a new deal. Ask your current lender what they can offer and then compare against what a whole of market adviser can find you - I'd move quickly in order to minimise your exposure to your current lenders SVR

Then again, BoE may do nothing this month - unfortunately it can be a bit of a guessing game.

MortgageMamma

If you want to have a look at what fixed rates are doing then have a look at this graph. This is called a swap rate and its based upon the banks prices for buying and selling wholesale funds. You will see that just recently the rates have dropped and fixed rate mortgages are beginning to follow suit.

If you are planning on staying in your new property long term then it may be wise to commit to a long term product. two year fixed rates are bad value for money - all the interest is front loaded and this means that at the end of the two years not only will you have added an arrangement fee, but you will have paid off very little capital. A longer term product gives you the chance to pay off more capital before you change mortgages again, and the arrangement fee becomes better value for money.

See this link http://www.swap-rates.com/UKSwap_extended.html

Code974

MortgageMamma wrote: »

If you want to have a look at what fixed rates are doing then have a look at this graph. This is called a swap rate and its based upon the banks prices for buying and selling wholesale funds. You will see that just recently the rates have dropped and fixed rate mortgages are beginning to follow suit.

Thanks for the replies, thats helped me to understand it a little more.

I notice from the swap graph that the rates changed only on the 4th of this month. From that are we to expect that our lendors fee will drop for fixed term shortly, or has it already done so?

Im currently with A&L and will be contacting them to find out whats on offer, but from looking at their website it maybe seems a 5 year fixed might be in order, although this looks like it will be putting up my monthly payments by £50. Was hoping to keep things closer to what I was paying now...

Sorry for all the questions, its great to have this information readily available though, wish I had this years ago when I started on the property ladder!

Tony

poppy10_2

Code974 wrote: »

Now, although I have been looking around for a new mortgage, after having read these forums I have noted that the BoE will be "hopefully" decreasing the rates another 1/4% on the 10th Jan 2008.

[strike] LOL, no chance of this happening.[/strike]

"I personally dont think thats likely to happen but it might"

Code974

poppy10 wrote: »

LOL, no chance of this happening.

OK, thanks for your input :think:

MortgageMamma

No such thing as no chance - the only people who can really say whether this will happen or not are the bank of england monetary policy commitee - so unless you are a member of that you should really rephrase your reply to

"I personally dont think thats likely to happen but it might"

poppy10_2

MortgageMamma wrote: »

No such thing as no chance - the only people who can really say whether this will happen or not are the bank of england monetary policy commitee - so unless you are a member of that you should really rephrase your reply to

"I personally dont think thats likely to happen but it might"

I told you so! :money::j