Mortgage Help! (Renewal)

[Bert365]

Hello

Our 2yr Fixed rate is up at the end of the month (sept) and was wondering what options there are. We got a letter saying about reverting back to the variable rate which saves us around £240 a month.

Is it worth sitting on a variable rate for a while to see what happens with the rates or get it fixed now cos the only way is up on the base rate.

Any advice would be great thank you

Bert

 

[Cheshire Cat]

Client for Uncle Spielburg

 

[Uncle Spielberg]

I know a man who can help.

 

[tedebear]

Go with the variable for a while - we have! The pain we suffered for a while on the higher fixed is now paying dividends (inversely)...

 

[beorhthelm]

the only way is up, but how fast? unlikly to be very quick as, aside from vat increase and oil price rises (which may yet turn south), there's little inflationary pressure. if, as an example, the fixed rate is 2% more than the current variable rate offered, theres alot of time before the variable rate will match the current fixed rate. i dont see it making up that much ground in 2 years, a 1% rise over a year would kill off any recovery.

one might also consider that as the variable rate goes up the fixed rates are unlikly to, at least not at the same pace. the rate banks borrow money for dishing out loans is far higher than the BoE 3mth rate, the base rate. this distortion is unlikly to be maintained as confidence returns to lending.

 

[Bigtomfu]

Just be wary that all lending institutions (banks, and building societies alike) will ramp up their SVR at the first sign of a BoE rate hike.

Despite inflationary pressures easing there are still those among the policy making community that believe this to be short lived and the BoE will come under pressure to raise rates.

Personally I think we are not likely to see any raises until q2 2011 but I could be wrong!

For now im sticking to the SVR, but am considering breaking the debt into chunks and fixing some and leaving the rest floating. ( I dont have a huge mortgage but my lender has already confirmed that I could do that if I chose.)

 

[seagullsovergrimsby]

For those whose fixed rate deal is coming to an end will it be easy to remortgage with another lender if they believe the SVR will rise another 1.5% over the next 12 months ?

 

[Uncle Spielberg]

Hey none of you have asked whether he can actually re mortgage. Thats the problem with giving opinons and quotes off moneysupermarket. You DO NOT his circumstances.

 

[Uncle Spielberg]

I could quote the HSBC 2.19% tracker with no penalties, £ 99 arrangement fee with a free survey and free legals. However I have checked his situation first.

 

[beorhthelm]

Hey none of you have asked whether he can actually re mortgage. Thats the problem with giving opinons and quotes off moneysupermarket. You DO NOT his circumstances.

because we are not financial advisers and are answering the general query, "where are rates going and should one fix?".

 

[Uncle Spielberg]

You cannot give any advice without knowing the persons circumstances.

 

[tedebear]

Hey none of you have asked whether he can actually re mortgage. Thats the problem with giving opinons and quotes off moneysupermarket. You DO NOT his circumstances.

He said he was on a fixed reverting to variable? He isn't re-mortgaging in that situation?

 

[seagullsovergrimsby]

I dread to think the numbers of people that are coming to the end of a fixed deal who will go onto the lenders SVR (which will inevitably rise) because they cannot switch elsewhere as the value of their property has dropped , more so outside of London and the S.E / S.W.

 

[Uncle Spielberg]

Its a timebomb waiting to go off.

 

[Uncle Spielberg]

because we are not financial advisers and are answering the general query, "where are rates going and should one fix?".

Your absolutely right. I got a bit " self important " there. Apologies.

 

[Alex Alex Dawson oo! oo!]

I could quote the HSBC 2.19% tracker with no penalties, £ 99 arrangement fee with a free survey and free legals. However I have checked his situation first.

The survey is not free with this HSBC deal Mr G and it also comes with a max of 60% LTV. The rate is tied to 1.65% above BOE base rate which comes out lower than their SVR - I think that's currently around 2.5% but don't have my notes to hand M'Lud.
We're currently remortgaging; my view generally is to get off being linked to an SVR and, if you don't want to fix, then look for tracker deals like HSBC that are linked to the BOE base rate.

 

[joker]

Hello

Our 2yr Fixed rate is up at the end of the month (sept) and was wondering what options there are. We got a letter saying about reverting back to the variable rate which saves us around £240 a month.

Is it worth sitting on a variable rate for a while to see what happens with the rates or get it fixed now cos the only way is up on the base rate.

Any advice would be great thank you

Bert

I took the advice of Uncle spielberg and it was good solid advice, my advice as a non money person would be to PM Uncle Spielberg and listen to him, he won't steer you wrong

 

[Uncle Spielberg]

The survey is not free with this HSBC deal Mr G and it also comes with a max of 60% LTV. The rate is tied to 1.65% above BOE base rate which comes out lower than their SVR - I think that's currently around 2.5% but don't have my notes to hand M'Lud.
We're currently remortgaging; my view generally is to get off being linked to an SVR and, if you don't want to fix, then look for tracker deals like HSBC that are linked to the BOE base rate.

Thats why I did not quote it. This is a cherry picking rate. They will decline 3 in 4. This rate is superb but only the privileged few will get access to it. Also fewer and fewer people in the country have a 40% equity or deposit. My advice was to get off the svr so I was of some use to you. HSBC will also offer non advised, execution only mortgages. This is fine if you are sure but if you need any advice or any comeback if anything goes wrong you will get none. This is EXACTLY what is wrong with the mortgage market. A handful of lenders cherry picking the best clients at 60% ltv and under with special rates and stuff the rest. The profit margins at 75% and over are the highest by far they have ever been in the last 50 years.

 

[Uncle Spielberg]

I am not going to give specfic details but I have advised Bert to stay with HSBC most likely on their svr with no penalties and keep an eye on the property/mortgage market.