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Mortgages



bomber130

bomber130
Jun 10, 2011
1,907
Have just been given a quote on a new mortgage and not to sure what to do. My offer is £760.00 per month on a 2.19% tracker rate or £820 at 3.19% on a five year fixed. This is to borrow £111,000 over 14 years. Am inclined to stick with the five year fixed as I know what I'm gonna pay and don't need to worry about interest rises. However Does anyone think the rate tracker rate will go above 3.19% (banks rate) over the next five years. Any help/advice would be appreciated.
 




Weststander

Well-known member
NSC Patreon
Aug 25, 2011
63,389
Withdean area
Have just been given a quote on a new mortgage and not to sure what to do. My offer is £760.00 per month on a 2.19% tracker rate or £820 at 3.19% on a five year fixed. This is to borrow £111,000 over 14 years. Am inclined to stick with the five year fixed as I know what I'm gonna pay and don't need to worry about interest rises. However Does anyone think the rate tracker rate will go above 3.19% (banks rate) over the next five years. Any help/advice would be appreciated.

Doom mongers including the IMF (and resentful savers) has been saying that interest rates are going to increase soon, for several years now, and all proved wrong. Illustrations provided by mortgage companies/consultants have to warn of increased rates. But if rates do rise, it won't be any time soon, and there is nothing to suggest that if and when they do, that they will increase significantly.
 


CorgiRegisteredFriend

Well-known member
May 29, 2011
8,310
Boring By Sea
I would go for the five year fix. The difference between the two mortgages is £60 which is not a lot of money in the scheme of things and the tracker will certainly go up at some point in the next five years.
 


Westdene Seagull

aka Cap'n Carl Firecrotch
NSC Patreon
Oct 27, 2003
20,938
The arse end of Hangleton
I'd very surprised if in the next five years there hasn't been a greater than 1% increase in the base rate. Admittedly it's likely to be in small increments such as 0.5% or even 0.25%.

I've seen it suggested that the rates will start to go up in either 2016 or 2017. If that is correct it means would only be likely to hit the full 1% increase towards the backend of your fixed term mortgage. Mathematically that means you'd be financially better off on the tracker.

*** Please note *** this is my opinion and not guarenteed to happen. I am not qualified to give financial advice

All in all it's peace of mind versus betting against the market. Only you can really decide which best suits you.
 




bomber130

bomber130
Jun 10, 2011
1,907
I would go for the five year fix. The difference between the two mortgages is £60 which is not a lot of money in the scheme of things and the tracker will certainly go up at some point in the next five years.

Have been sitting here thinking about that and yes £60. 00 extra will get swallowed up in one interest rate rise. Thanks for everyone's advice, gonna go with the fixed as it the safest option.
 


Westdene Seagull

aka Cap'n Carl Firecrotch
NSC Patreon
Oct 27, 2003
20,938
The arse end of Hangleton
Have been sitting here thinking about that and yes £60. 00 extra will get swallowed up in one interest rate rise. Thanks for everyone's advice, gonna go with the fixed as it the safest option.

Actually for every .25% increase it would add around £14 to your monthly bill. I'd get broker advice before jumping if I were you.
 


HantsSeagull

Well-known member
Aug 17, 2011
4,016
Caught in a Riptide
i am a mortgage broker and if i were in your shoes i would take the five year fix. Historically five year money is at an all time low (pretty much) and base rate is only going one way.
 




seagullsovergrimsby

#cpfctinpotclub
Aug 21, 2005
43,690
Crap Town
General election next year so you'll have to second guess the result and potential impact. I'm sure Uncle Spielberg will tell you all the pros and cons.
 


Uncle Spielberg

Well-known member
NSC Patreon
Jul 6, 2003
42,779
Lancing
Have just been given a quote on a new mortgage and not to sure what to do. My offer is £760.00 per month on a 2.19% tracker rate or £820 at 3.19% on a five year fixed. This is to borrow £111,000 over 14 years. Am inclined to stick with the five year fixed as I know what I'm gonna pay and don't need to worry about interest rises. However Does anyone think the rate tracker rate will go above 3.19% (banks rate) over the next five years. Any help/advice would be appreciated.

This is likely to be the Nationwide Building Society.
 


Weststander

Well-known member
NSC Patreon
Aug 25, 2011
63,389
Withdean area
General election next year so you'll have to second guess the result and potential impact. I'm sure Uncle Spielberg will tell you all the pros and cons.

Bank of England independent of Government, so rates will be determined by the global markets and BoE responses to our economy.

Then god forbid Moribund and Balls are given a second go at a government spending spree, either alone or in a coalition:
- rates would have to rise if a Balls borrowed spending spree led to inflation and/or global markets reacting badly to Labour's policies and their effects.
 






Uncle Spielberg

Well-known member
NSC Patreon
Jul 6, 2003
42,779
Lancing
Unless you want to sell within 5 years and not buy again, the 5 year fixed imo is a definate from those 2 options. Metro Bank will do 3.09% fixed for 5 years with a free survey and free legals. * generic depends on circumstances *
 


Uncle Spielberg

Well-known member
NSC Patreon
Jul 6, 2003
42,779
Lancing




bomber130

bomber130
Jun 10, 2011
1,907
Unless you want to sell within 5 years and not buy again, the 5 year fixed imo is a definate from those 2 options. Metro Bank will do 3.09% fixed for 5 years with a free survey and free legals. * generic depends on circumstances *
Thank you for the advice don't intend to sell so the fixed rate is my best option
 


Uncle Spielberg

Well-known member
NSC Patreon
Jul 6, 2003
42,779
Lancing
Thank you for the advice don't intend to sell so the fixed rate is my best option

I think so. Good luck. Let me know if you need any advise at all.
 




Uncle Spielberg

Well-known member
NSC Patreon
Jul 6, 2003
42,779
Lancing
In 3 years Bank base rate is likely to be 3% and variable/trackers 1-2% above that.
 




Uncle Spielberg

Well-known member
NSC Patreon
Jul 6, 2003
42,779
Lancing
£499 plus £195 valuation and £30.00 for some kind of transfer I presume to transfer the money to repay to Santander

legal fees ? could be £ 500 plus, probably £ 150 to leave Santander. May be worth seeing what they will offer you first.
 


beorhthelm

A. Virgo, Football Genius
Jul 21, 2003
35,264
In 3 years Bank base rate is likely to be 3% and variable/trackers 1-2% above that.

that would be a 0.25% rise every quarter you're pencilling in. and as we wont probably be seeing in anything until 2015, a couple of 0.5% hikes will be needed to hit that target. with inflation trending downwards and below target, the question is, where do you expect the surge in growth to come from that will lead to this rise?
 



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