Remortgage
Time to…
I am thinking tracker… currently, over two years it would cost me 1k more, but if rates go down by half a point, then it works out the same as a fixed deal but with no penalties for early repayment, which for us is a possibility.
Up to yesterday I was in the 2 year fixed deal camp, but this morning announcement on inflation I have the feeling rates will begin to come down (energy prices also falling in April).
Thoughts?
Comments
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Thoughts? Rates are likely to fall before the election, and remain for a few months following.
After that, who knows?
The above may be fact, or fiction, I may be serious, I may be jesting.
I am not sure. You have no chance.Veronese68 wrote:PB is the most sensible person on here.0 -
It’s always going to be a gamble either way… I just find it difficult to accept paying £999 for a 2 year fixed deal, which is likely going to be a bad deal and one it will be costly to get out of, should I want to. The n two years later, I would have yo pay another fee…
I can find a tracker free of charge that I can get out of with no penalties or very small penalty at an apparently higher cost as of now. I can’t see rates going up in the next couple of years… people’s pockets are empty and the Bank of England knows it. If they were to push interest rates to 6% or higher, there would be riots in the streets
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Have you got long before you actually move onto a new rate Ugo?
Mine ends in July. Have accepted a 2 yr fixed for now but can always cancel if something better comes along before then. I agree the £999 fees are hard to swallow.
The banks are obviously trying to price in what they think the rates will do into their fixed rates, hence the mortgage rates already being well below current base rate. You might outsmart them, you might not.
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- Dolan Tuono0 -
same as you, end of July…
left the forum March 20230 -
with 110k debt, 999 over two years are worth half a percentage point penalty in interest rate… I might have found a fee free fixed deal that only penalises me
by 0.3… exit fee 2%, which would be a couple of thousand quid… seems worth a punt
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Always good to have an early repayment option, but can you not find one that lasts for longer? Mine (admittedly taken out pre-covid in 2021) is a 12 year mortgage, fixed for 5 then onto floating rate. I intend to pay it off well before then and will save a fair bit on the interest by doing that.
"I spent most of my money on birds, booze and fast cars: the rest of it I just squandered." [George Best]0 -
we want to leave the country in 3-4 years, so anything long needs to have a free exit. Basically, sell the house, bag the equity, and move to Italy…
Early retirement, innit…
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I went onto a tracker last year, the best fixed deal we could get was north of 6% so we decided to gamble and so far it's paid off. The lack of early repayment charges was a bonus which we have taken advantage of a bit. The fixed rates now are a lot better than they were last year though so I'm not sure I'd take the same bet now.
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turns out they can offer me 2 year fixed at 4.69% with no entry fee, a deal which I could not see online, which seems pretty good, so I’ll take it for now
left the forum March 20231 -
Are your finances stable enough and is your income sufficiently higher than your mortgage repayments that you can handle/not notice the shocks of rate rises quite easily?
If that's the case, trackers are fine. If not, the ease of a fixed makes managing your finances easier.
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Does that mean you will sit on the tracker as it is currently, and then switch to a fix should something appealing enough turn up?
Our 5 year 1.49% fix ends in January 2025, going to start looking from July this year.
Unfortunately we still owe 6 figures, but that is what a house extension will do for how much you owe 😐️
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Yes, I'm planning to stick with it for now. I keep an eye on the 2 and 5 year fixed rate offers as they give a decent indication of how the banks expect the base rate to change, if they're offering 4-4.5% over 2 and 5 years now they're probably expecting the base rate to drop and stay lower. If we ever get back to the fixed rates being around 2% or lower I might go for one of those to protect against anything causing significant volatility, but I'm also planning to increase my overpayments. That may be limited on a fixed rate so I'd have to consider whether I'm likely to want to exceed the overpayment threshold for a given fixed offer.
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A bit, it didn't give an extra bedroom, just more living space downstairs/new bigger kitchen/dining area etc.
Current LTV would be around 25-30% I would estimate.
Are most people thinking to go for a tracker for the time being then, and then switch to a fix when/if they drop enough to give stability?
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TBH it depends when I get to remortgaging (Dec '24). If say a 2 or 3% rise in the interest rate suddenly means I can't afford that month's mortgage payment if I'm on a tracker, I probably will go with a fixed.
If I can handle that, I'll take the view. But it's also about the overall cost of the product, right? People talk about fees of a thousand or two but on a mortgage payment it can pay for itself over the duration of a product quite easily.
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yes, depends on the product duration and how much you are borrowing.
For a 2 year deal and 100k or less, a grand entry fee is a bit stiff. When we started the mortgage at 185k and 5 year deal at 1.9%, it did seem good value
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So early repayment is a good thing to have in your case.
"I spent most of my money on birds, booze and fast cars: the rest of it I just squandered." [George Best]0 -
for a 2 year deal it doesn’t matter too much, anything longer and it would be essential
left the forum March 20230 -
I hate to break it to you, but 2009-2022 interest rates were not normal. It was effectively free money.
Fixed rates are highly unlikely to go back to 2%.
We are now back in the normal interest rate region. Some cuts are likely from the second half of this year, but don't expect much more than a 1% fall in the base rate in the next couple of years.
A fee free, exit free tracker feels like a good compromise for the next 12-18 months if it is lower than the SVR .
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I don’t think 3-5% interest rates are as nailed on as some people make out.
Growth is still sclerotic and inflation is falling. Could quite easily end up with low inflation and low growth again - where do you think rates are gonna go then?
look at Japan.
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What a depressing thought that things are going back there, and it is me saying that! 😉
Things settling down at 3-5% would indicate growth which we should all be hoping for.
The above may be fact, or fiction, I may be serious, I may be jesting.
I am not sure. You have no chance.Veronese68 wrote:PB is the most sensible person on here.0 -
Agreed, when I did the calculations on our 5 year fix, the £1000 fee was easily more than recovered by the lower interest rate over that period.
On a selfish note, I'm hoping that we might see the base rate drop by 1% in the next 12-24 months.
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Not that the market is especially right but as an indicator, it's currently pricing in 75 basis point cuts in 2024. (aka 1 more rate cut than they were expecting before).
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I said if, not when. I'm not really expecting rates to fall to 2% again, but if they do I'd be tempted to lock it in for obvious reasons.
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done… 2-year fixed at 4.69 with no entry fee and an early repayment of 2% of the capital.
Overall 10 years left after restructuring, but we will aim to pay it off in 5…
Early retirement, here I come 😎
left the forum March 20232 -
No mortgage and working part-time because i want to and not pulling off pension yet before 65 was my aim, got there before I was 58 with hardwork and good decisions. Over the years fixed rate deals and over payments has saved me.a lot. As mentioned above rates now are normal compared to recent low rates and I also remember when it was double digits. 😞
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I can't remember the exact figures as it was so long ago but when my fixed mortgage was up I managed to remortgage at 0.5% lower. Simply keeping my payments the same knocked 7 years off the term. Something for everyone remortgaging to think about.
The above may be fact, or fiction, I may be serious, I may be jesting.
I am not sure. You have no chance.Veronese68 wrote:PB is the most sensible person on here.1 -
I have lready knocked off 7 years of the original plan… in the space of 5 years. Plan is to knock off another 5 years… the 10% overpayment thing will be quite effective in the next few years, then next to useless after that, so better kill it off
left the forum March 20230
