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fluffy666

5-Year Fix Watch - Now Down To 3.39%

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On the basis that I may go for a fix come November when the current one expires..

Chelsea BS - 3.39% (1500 fee)

Yorkshire BS - 3.49% (1000 fee)

Nationwide BS - 3.79% (1000 fee)

All 70-75% LTV

I prefer to look at 5 year fixes, 2 year fixes are a bit more subject to gaming.

Question, is it worth giving up a lifetime BOE+0.5% rate for any of these..

(Apologies for posting a subject vaguely related to house prices..)

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On the basis that I may go for a fix come November when the current one expires..

Chelsea BS - 3.39% (1500 fee)

Yorkshire BS - 3.49% (1000 fee)

Nationwide BS - 3.79% (1000 fee)

All 70-75% LTV

I prefer to look at 5 year fixes, 2 year fixes are a bit more subject to gaming.

Question, is it worth giving up a lifetime BOE+0.5% rate for any of these..

(Apologies for posting a subject vaguely related to house prices..)

just looked at Chelsea.

its MINIMUM deposit is 30%...these are MINIMA for the perfect borrower.

and this is interestign too: If we agree to you letting the property, we will increase the interest rate we charge on your mortgage account by 1% throughout the letting period.

Edited by Bloo Loo

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just looked at Chelsea.

its MINIMUM deposit is 30%...these are MINIMA for the perfect borrower.

Even that's improved, was looking at 40% a few months ago. For many people remortgaging, 30% should not be that much of a problem as long as there is no house price discovery.

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On the basis that I may go for a fix come November when the current one expires..

Chelsea BS - 3.39% (1500 fee)

Yorkshire BS - 3.49% (1000 fee)

Nationwide BS - 3.79% (1000 fee)

All 70-75% LTV

I prefer to look at 5 year fixes, 2 year fixes are a bit more subject to gaming.

Question, is it worth giving up a lifetime BOE+0.5% rate for any of these..

(Apologies for posting a subject vaguely related to house prices..)

Fluffy, BofE + 0.5% isnt going to be very profitable for any lender, which means you are getting a very good deal there, which I would be loathe to give up.

That doesnt mean these five year fixed rate deals wont be even better, particularly if we get a bit of a debt crisis here too, something I see as inevitable. But if you stay where you are, you arent going to lose too badly no matter what.

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I've a lifetime BOE+0.99% tracker and I've no intention of cashing that in for a fix, no matter how attractive current fixes seem. A lifetime BOE+0.5% tracker is like gold dust and unlikely (IMO) to be seen again for a number of years.

And - note also the reversion rates of those five-year fixes once they expire - probably onto the lender's SVR which isn't going to be anywhere near as competitive as your tracker.

And - you're currently paying a rate of just 1% - why not overpay to the equivalent of the five-year tracker rate now to act as a hedge against rising rates? (Or, more sensibly, stick the overpayments into a savings account paying more than 1% and use those savings to pay off some of the mortgage balance once rates rise - which they will.)

Of course, it does depend on the size of your mortgage and how that is relative to your income. A larger mortgage on a tracker will (duh) be affected greater by interest rate rises that a smaller mortgage.

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Even that's improved, was looking at 40% a few months ago. For many people remortgaging, 30% should not be that much of a problem as long as there is no house price discovery.

that may be because house prices are 10% lower

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imagine you are a nice fresh ftb.

You want to buy a nice fresh 3 bed semi for the average house price, lets say £160,000

You are attracted to this deal, but, like most average people you earn average wage.

you need to hand the nice seller an envelope with £48,000 in it.

you then need £3000 for the solicitors, surveyors,removals, etc etc...thats £51,000

next you need your mortgage....£195 is paid up front then £1300 is added to your mortgage requirement of £112,000, so £113,300 ( you can see how that small "fee" will compound up over your 25 years).

so you do it all and end up repaying £600 per month or as near as dammit.

leaves you with £250 per week for everything else.

Of course come 2016, that bill goes up ( at todays rates) to £798 per month a net pay cut of £50 per week.

Its doable.....but the deposit.....thats a doozy..........if you saved all your spare cash it would take you..16 years.

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Fluffy, BofE + 0.5% isnt going to be very profitable for any lender, which means you are getting a very good deal there, which I would be loathe to give up.

That doesnt mean these five year fixed rate deals wont be even better, particularly if we get a bit of a debt crisis here too, something I see as inevitable. But if you stay where you are, you arent going to lose too badly no matter what.

Actually, apologies are in order (and to Spangled ), I meant BOE+2%.. so currently 2.5%

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Actually, apologies are in order (and to Spangled ), I meant BOE+2%.. so currently 2.5%

Hmm, that would make the decision much more marginal.

FWIW, I think I would go for one of those fixed ones. Better still, get a ten year and pay a bit more. Record low interest rates mean fixing your repayment is likely to be a winner.

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Actually, apologies are in order (and to Spangled ), I meant BOE+2%.. so currently 2.5%

Hmm, OK that does change the equation a little!

I suppose it depends on your attitude to risk and your inclination for when IRs will rise.

BOE+2% is not *bad* - as you're at/around 75%LTV, I think you'd be hard-pressed to beat that rate with the lifetime trackers available on the market today. (Example: First Direct's 75% LTV lifetime tracker is BoE + 2.39%.)

So comparing against a five-year fix, it just depends when you think IRs will rise (and how quickly) within the life of that five-year period. Pretty sure there are calculators out there that enable you to crunch your specific numbers (outstanding mortgage, term left, salary etc) and figure out how long you need IRs to stay low/low-ish in order for your tracker to beat a five-year fix.

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If I had to buy now I'd take a 10 year fix about 4.89%ish and I'd be borrowing around £80k at current prices. I'd over pay it by £150 per month and by the time the fix is finished I'd only have a couple of years left to pay. Job done.

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Question, is it worth giving up a lifetime BOE+0.5% rate for any of these..

No. Base rates won't go above 1% in the next 10 years IMHO. They should obviously, but they won't.

Edited by Constable

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No. Base rates won't go above 1% in the next 10 years IMHO. They should obviously, but they won't.

Are you sure?

Ten years ago if you had told someone the BofE base rate would be down to 0.5% for two years (think its been that long), they would have laughed at you. Things can change very quickly. I find it difficult to believe that 0.5% is a stable rate.

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It's the availability of such low fixed rates over a reasonable time-scale (ie 5 years) which makes this bear ready to jump into home ownership. Decent deposit earning bugger-all interest? Check. Current rent a blatant rip-off due to dearth of decent rental properties? Check. Target houses around 15-20% off peak? Check. (Relatively) stable job prospects? Check. Pissed-off wife who really wants our own place? Check.

Take a 5 year fix at 3 point something, overpay 10% each year, job's a good 'un, no?

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It's the availability of such low fixed rates over a reasonable time-scale (ie 5 years) which makes this bear ready to jump into home ownership. Decent deposit earning bugger-all interest? Check. Current rent a blatant rip-off due to dearth of decent rental properties? Check. Target houses around 15-20% off peak? Check. (Relatively) stable job prospects? Check. Pissed-off wife who really wants our own place? Check.

Take a 5 year fix at 3 point something, overpay 10% each year, job's a good 'un, no?

30 % deposit...check.

perfect credit score..check

way above average wage...check

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No. Base rates won't go above 1% in the next 10 years IMHO. They should obviously, but they won't.

I think it's more than possible that inflation will really spike at some point (note: 5% is not a spike, 25% is an inflation spike..), and that somewhere along the line IRs will have to follow.

Still, I have till November to thing about it. At the rate the rates are dropping, it'll be a 0.1% 10 year fix by then anyway..

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No. Base rates won't go above 1% in the next 10 years IMHO. They should obviously, but they won't.

As house prices only ever go up, interest rates only ever go down? :lol:

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30 % deposit...check.

perfect credit score..check

way above average wage...check

Apologies for being thick - was that a question or an answer?

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  • 335 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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