Mortgage, 2008 vs 2006.

tomstickland

I bought a flat valued at £90K two years ago. I paid £86K.
Took out a £76K mortgage, currently owe around £72K.

Rate was 4.3% with £700 arrangement fee.
Repayment £420 per month, fee/24 is £33, hence equivalent monthly payment of £453.

I've spoken to the mortgage broker today and the best deal he could come up with was 6.3% with a £299 arrangement fee on a 3 year fix.
This is £500 per month, fee/36 is £8, hence equivalent monthly payment of £508.

This is £55 per month increase, 12% of the original payment, or a 6% per annum rise.

Lower rate mortgages ended up costing the same or more once arrangement fees were included. A 5 year fix at 6%, ended up costing £505 per month.
Variable rates ended up a few pounds more expensive.

I expect that some people are going to get a nasty surprise when they remortgage in the next year or so.

dimbo61

is this your home ? has it gone up in value in last 2 years ?
dont you wish you had taken out 3/5 or even a 10 year fix at the time !
If you need security of knowing how much your mortgage is going to be
for the next couple of years and you dont plan to move then consider long term ie the 5 year deal.
give yourself time to clear some of the mortgage and build up more equity
or even overpay with offset mortgage and pay off the mortgage completley.
GOOD LUCK

sarkin

People have been getting nasty surprises all year. You could have had 4.99% fixed for 10 years up untill last year, but no one wanted it.

DebtSniper

dimbo61 wrote: »

dont you wish you had taken out 3/5 or even a 10 year fix at the time !

I only regret this every single day!

The rest of the time I am in denial.

tomstickland

Some answers:
-This is my home.
-I don't care whether it's gone up in value. The flats have aprroximately held their value for 4 years.
-I have no expectation of building up equity.
-No, I don't regret not taking out a longer fix. I do regret not factoring in the fees properly though.
-At the moment I think a 3 year fix is fine.

pavlovs_dog

tom i cant believe its been two years! seems like only yesterday you were pondering which brand of paint to buy, discovering 'treasures' in your new garage.... and wandering around the forums with a toilet seat around your head

looking back are you pleased with your purchase and how things have panned out?

tomstickland

Yes, very pleased. Even if I go into negative equity I'll consider it worth it.