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Mortgage Rate Question

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Maybe a thick question but as someone who is new to mortgages i'll ask anyway......... :ph34r:

A mortgage is fixed at 4.25% for 2 years then after that it changes to 3.99% and linked to the BOE rate.

What percent would it be if rates hit 5%? Or is this one of those "how long is a piece string" questions?

Thanks for any help

Edited by pajd

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If it is linked to BOE rate then its 3.99 +BOE = new rate. So if BOE is at 5% then new rate is 8.99%.

Here is a link to SVR rates and how they linked to BOE rate historically.


Thanks doccyboy

So a 140k mortgage is just over £1100 per month in that case once the rate hits 8.99% :o That seems a bit high does it not?

My cirumstances are

25k deposit

House price limit 140k

On moneysupermarket the lowest mortgage rate is 2 years fixed at 4.25% then reverts to 3.99% plus BOE

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To get a good rate for 5 years (which is a safer option in my opinion ) then your 25k will need to be 20% of valuation. So that means that you will be looking at a house with valuation not asking price of 125K. So you need to bargain hard. Remember you will need to keep some money back for legal fees - mortgage arrangement fee- survey fee and incidental expenses of moving in. So be very careful of the house you will buy and make sure you get it for a price that a valuer is going to agree with.

I have a seperate savings account for legal fees, 6 months worth of mortgage payments etc. The 25k is for a deposit. Not many 125k houses around here sadly

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