Leeds & Holbeck LIBOR Mortgage

DMarsh

I'm looking to re-mortgage for the first time. Using the Charcol website I found a mortgage from Leeds & Holbeck that appears to be significantly cheeper for a 10 year mortgage than any other provider. The rate is based on the US LIBOR.

Does anybody know what the advantages/disadvantages of this are?

Any information would be greatly appreciated.

Thanks

meanmachine_2

Is a libor mortgage not one that banks offer to intermediaries?

Or am I totally wrong on that?

DMarsh

Pass!...

This is the blurb on the website...

"Variable rate which is 0.75% above US 3 month LIBOR , currently 3.75%, until 31 August 2015, to give a current rate payable of 4.5%. The US 3 month LIBOR rate is reviewed on 1st April, 1st July, 1st October and 1st January. Any changes in this rate will only be reflected on these dates."

Woby_Tide

It's just like a UK tracker only it tracks the US LIBOR rate instead(which given it's on the rise nowis probably not the wisest)

A few companies have offered them previously i.e. Skipton, use the search facility for this board and there should be 2 or 3 topics with LIBOR in the title where they were discussed

Woby_Tide

Hard to find stuff really, even their quote of 3.75% as of July 1st looks to have been rounded up

http://www.fanniemae.com/tools/libor/2005.jhtml;jsessionid=UIDT3S5JH234BJ2FECISFGA?p=Tools+%26+Resources

july rate was 3.6948 according to fanniemae, already August is 3.872, so depending how they round up(i.e. could be 3.9 or 4% I guess the new rate from October 1st looks likely to be 4.75%, though of course rates could rise or fall in the interim)


Edit: Also when you say it's significantly cheaper for a 10 year mortgage how are you basing that, as it's a tracker it's impossible really to compare a 10 yr cost, (unless we assume rates aren't moving), 10 yr fixes can be had for 4.89% or less, but still hard to compare cost with a tracker.

DMarsh

Fair comment, I was looking at it simplistically. The search results on Charcol show a 'total cost over term' column. This varies between 17k and 22k. as opposed to 15k. But this as you say is based on the rates being unchanged.

Woby_Tide

When looking recently I was a bit disappointed with some of the recommended online brokers over how their "cost over term" column worked. Even trying to compare 2 year fixes, despite from other info I knew which was that A&L's 4.24% was pretty much likely to be the top 2 year fix over 3 years, the brokers would always offer ones such as Chelsea BS SVR and Scarborough BS SVR which were c. 6.59% because they both offered 10% cashback, yet redeeming before 10 years meant the cashback had to be repaid. Even choosing deals without overhanging redemptions wouldn't remove them.

meanmachine_2

Anything tracking the US economy is to be steered well clear of, if you ask me.

The FED have house prices well in their sights right now, so they're on a fiscal tightening path.

Better off sticking with the milksops at the BoE, who seem to think only about ensuring Gordon Brown gets into number 10 (in other words, forget inflation let's keep the housing bubble inflated).

DMarsh

Thanks for the advice.

I seem to have become distracted from my original criteria, after using Charcol.

I think I want a mortgage that calculates the interest daily and allows extra payments and doesn't penalise me if I pay off the mortgage early. Since I generally have surplus funds.