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65% Ltv On My Mortgage - What To Do Next ?

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Hi all

I have 65% LTV on my mortgage - what should I do next ?

Currently have a repayment mortgage at 3.99% Since buying.

Can't really afford to overpay in the next few years.

Is now a good time to fix for 5-10 years as rates are getting lower or shoud we stay as we are

Expecting lower rates to come etc ?

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Take MEW for a BTL deposit.

NO!!!! DONT BE INSANE.

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Get in now, before you miss out.

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If the bank are offering you 10 years at 4% then they don;t expect rates to rise above this.

Were in the process of taking out a first direct tracker at 1.79%, it allows us to make significant overpayments. It's a gamble against rates going up and the economy being stuck in another lost decade. Im still quite bearish on the economy, so I don;t see western policy makers (UK, US, EU) putting up rates and considering that rates are sill levels in places like belarus with no knock on effects I think the western bankers still have stranglehold over everyone.

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If the bank are offering you 10 years at 4% then they don;t expect rates to rise above this.

Were in the process of taking out a first direct tracker at 1.79%, it allows us to make significant overpayments. It's a gamble against rates going up and the economy being stuck in another lost decade. Im still quite bearish on the economy, so I don;t see western policy makers (UK, US, EU) putting up rates and considering that rates are sill levels in places like belarus with no knock on effects I think the western bankers still have stranglehold over everyone.

Thx didn't think if it that way. I'll have to consider a tracker as I don't expect rates to go up anytime soon. Why would the banks need to give everyone interest when they make money from thin air anyway and don't need to pass these low rates on to homeowners.

But what if rates do rise... Don't know I can take that chance.

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Current expectation for first rate hike is Q1 2016. Best 5 year fixed is about 2.75% (inc fees), best tracker base +1.47% (inc fees). The sterling curve would imply you’d be paying less on the tracker p/m until approx mid 2017, with even implied repayment in Q1 2020 about 3.25%. That would make a tracker cheaper in the short-medium term. etc etc...

An adviser will tell you something like that, but nobody knows where rates are going. If it was me I'd assess the most I could comfortably afford p/m. If that’s not much greater than current fixed inc fees, go fixed and sleep well. Otherwise go for the cheapest tracker with no overpayment or early repayment charges. Watch fixed rates and if/when they rise to your level switch.

The BoE inflation report tomorrow will probably generate some headlines on their thinking, and adjustments to market pricing expectations.

(Edit: adjustment for fees on tracker - makes tracker vs fix equivalent over 5 years)

Edited by northshore

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Thx didn't think if it that way. I'll have to consider a tracker as I don't expect rates to go up anytime soon. Why would the banks need to give everyone interest when they make money from thin air anyway and don't need to pass these low rates on to homeowners.

But what if rates do rise... Don't know I can take that chance.

If you can't take a chance then fix. It doesn't matter if it costs you slightly more, you will at least know where you stand.

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If you can't afford to overpay then by implication, you can't cover the mortgage if rates rise. That being the case, you'd be insane not to take a fix, especially when five year fixes at 65% LTV are available at 2.25%.

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