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pajd

Seen A House We Like

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I viewed a house on saturday(im based in Northern Ireland) The guy has it on sale for 135k but due to a change in his circumstances he wants out quickly and told me he would take 125k. At peak the houses in this street were on at 225k. I can put down 25k deposit.

The question now is do i go for a 5 year fixed rate just to be safe with regards interest rates? Do you think they will rise quickly in the next couple of years?

Edited by pajd

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The question now is do i go for a 5 year fixed rate just to be safe with regards interest rates? Do you think they will rise quickly in the next couple of years?

Yes.

Just keep in mind early repayment charges. 5 years is a long time.

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My feeling if that rates will go up in 0.25% increments every 3 months starting in May. At that rate you would only just break even with a 5 year fix by my calculations. (But I can get 4.29 for 5 years)

If they go up faster or further you'd be in profit.

You could do your own calculations in a spreadsheet and see but at the end of the day, when rates do go up, and we all know they will, can you still afford it? If you can, maybe you can gamble on Merv being slow to act and save yourself a few quid.

The house does sound suspiciously cheap. Make sure you get a proper survey done and research the area.

Edited by MC Fur Q

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Thanks.

As no-one has mentioned a tracker mortgage im guessing i should steer clear of it?

The trackers I've seen lately tend to be around the base + 2% mark which is obscene when rates get back to normal around 5%. I think this is going to be down to the spread between Libor and the base rate but who knows, when rates go up, will the spread be maintained? I doubt it, I expect that this is mostly caused by the inflation risk to debt markets.

A shorter answer would have been: yeah, steer clear of trackers.

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The trackers I've seen lately tend to be around the base + 2% mark which is obscene when rates get back to normal around 5%. I think this is going to be down to the spread between Libor and the base rate but who knows, when rates go up, will the spread be maintained? I doubt it, I expect that this is mostly caused by the inflation risk to debt markets.

A shorter answer would have been: yeah, steer clear of trackers.

Back to the drawing board.

House has been taken off the market. Cash buyer has come in and suddenly the EA tells me the seller has to sell it within 2 weeks. Funny that - the EA and the seller knew i was a FTB and never mentioned the time constraint before :rolleyes:

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Back to the drawing board.

House has been taken off the market. Cash buyer has come in and suddenly the EA tells me the seller has to sell it within 2 weeks. Funny that - the EA and the seller knew i was a FTB and never mentioned the time constraint before :rolleyes:

You've had a lucky escape, treat it as a sign from above ;).

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  • 309 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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