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flyingscotsman

Looking At Mortgage Deals - What Is "for Term".

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Scanning through the "Best buys" for mortgages in yesterdays Guardian. The learning curve is steep and my brain is hurting.

It shows the following - using first direct in the Discounted Variable Rate section as an example:

first direct - rate 2.29% - for 2 years

or

first direct - rate 4.69% - for term

Can anyone please advise what is meant by "for term" in the second product and how it differs from the "for 2 years" in the first example.

Thank you.

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Scanning through the "Best buys" for mortgages in yesterdays Guardian. The learning curve is steep and my brain is hurting.

It shows the following - using first direct in the Discounted Variable Rate section as an example:

first direct - rate 2.29% - for 2 years

or

first direct - rate 4.69% - for term

Can anyone please advise what is meant by "for term" in the second product and how it differs from the "for 2 years" in the first example.

Thank you.

Not sure now you mention it, but I would have otherwise assumed it to mean the term of the mortgage, ie 25 years for the majority of new ones.

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Scanning through the "Best buys" for mortgages in yesterdays Guardian. The learning curve is steep and my brain is hurting.

It shows the following - using first direct in the Discounted Variable Rate section as an example:

first direct - rate 2.29% - for 2 years

or

first direct - rate 4.69% - for term

Can anyone please advise what is meant by "for term" in the second product and how it differs from the "for 2 years" in the first example.

Thank you.

I assume "for term" means until the end of the mortgage, and the way it is written above, I would read it as the equivalent to a 25 year fixed rate 4.69% mortgage, which is almost daftly cheap. Just think - take a second mortgage at 4.69% and stick all the extra cash in a bond bearing >4.69%. For example, the NS&I inflation + 0.5% bond.

I would expect a "for term" to refer to something like "SVR, currently 4.69% for term", which is the standard variable rate, which is whatever the bank feels like charging its tied-in customers, which is typically a bit higher than the rate offered to new customers.

I'm not a financial advisor, don't run with scissors, always check bathwater with your elbow, don't buy a black car etc etc.

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I assume "for term" means until the end of the mortgage, and the way it is written above, I would read it as the equivalent to a 25 year fixed rate 4.69% mortgage, which is almost daftly cheap. Just think - take a second mortgage at 4.69% and stick all the extra cash in a bond bearing >4.69%. For example, the NS&I inflation + 0.5% bond.

I would expect a "for term" to refer to something like "SVR, currently 4.69% for term", which is the standard variable rate, which is whatever the bank feels like charging its tied-in customers, which is typically a bit higher than the rate offered to new customers.

I'm not a financial advisor, don't run with scissors, always check bathwater with your elbow, don't buy a black car etc etc.

Yeah, it's just quote of their current SVR that the mortgage will revert to once the discount/fixed period ends. It could and probably will be different when the time actually comes around for this. Of course any sensible sod will remortgage straightaway and avoid this.

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  • 312 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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