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My wife bought in 2009 before we met and with a little'un on the way it would be nice to know exactly what is going out each month.

We're currently on SVR about 4% so I was wondering if it was worthwhile fixing for ten years. I think we'd get just above 3% at current valuation.

Can mortgage rates go much lower? Would you fix now in my situation?

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If you're confident you're staying put then why not. Although depends on your LTV as if it's good say 60% you could probably get a much lower rate than 3%... A friend of mine recently remortgaged at 1.3%.

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1.3% on a ten year fix?

Fair point on staying put, maybe a five year fix might be more appropriate. New to this really. Forgive my lack of knowledge, but if we did want to move within the fixed period, is it likely there would be penalties? Our does it vary considerably between providers?

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It varies but there are usually penalties of some sort. Generally a percentage like 3% of mortgage value, so a few grand at least.

You won't get a ten yet fixed at 1.3% but what are the chances of rates going up? I can't see it happening for years yet.

I'm not sure what sort of rates are on offer for ten year fixes but if you do have a good LTV and can get a super low rate, you may be able to significantly overpay your mortgage which will take years off the end and raise your equity quickly.

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My wife bought in 2009 before we met and with a little'un on the way it would be nice to know exactly what is going out each month.

We're currently on SVR about 4% so I was wondering if it was worthwhile fixing for ten years. I think we'd get just above 3% at current valuation.

Can mortgage rates go much lower? Would you fix now in my situation?

I think it all comes down to whether you have the ability and fortitude to overpay your mortgage now and in the future.

Pros:

You know what you will pay (and it should be lower than SVR) for a significant period

If you can overpay 10% a year its basically like buying an insurance policy - the price of the policy is the difference between short term and long term rates and the time value of money plus your expectation of a rate rise

Interest rates may rise strongly due to unforeseen events, reducing house prices and increasing mortgage payments. If you cannot afford to overpay and you believe a rise in rates above the 10 year fix puts a roof over your head at risk then you need to fix

Cons:

  • If you are not below 60% LTV you will be getting a bad deal as you will most certainly be below it within 10 years and will not be able to switch
  • porting the mortgage may be unfavourable if you are moving
  • We have seen with Japan as an example that you can have extended periods of very low rates over 10 years. a possibility to remember but obviously no one knows.
  • You could simply take a cheaper 2/3 year fix and over pay if you can (i,e pay the same monthly payment as a 3.2%, the 10% each year as well as into a savings account (santander 123 account) used to clear the mortgage after fixed rate ends), this would have the same result as a 10 year fix but without the lock in - i.e if interest rates rise your monthly payment will go up less as your capital owed is smaller.
  • Given the historical levels of govt debt, any interest rate rises in the west would lead to immediate balance of payments crises - i.e govts will fail as well as banks

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I have fixed for 10years.only wah I find out if I did right thing id in 5 years time.

I also with tsb and can re mortgage at after 5 years if I want to with there flex mortgage

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Thanks for the responses. We could overpay, but would rather have the extra cash available for the next few years as the cost of our forthcoming child is currently an unknown to us.

katchytitle, your first and last cons are very powerful to my mind. I'm going to investigate shorter fixes but if it doesn't happen I won't feel overly worried.

Thanks again all.

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Thanks for the responses. We could overpay, but would rather have the extra cash available for the next few years as the cost of our forthcoming child is currently an unknown to us.

katchytitle, your first and last cons are very powerful to my mind. I'm going to investigate shorter fixes but if it doesn't happen I won't feel overly worried.

Thanks again all.

First child? Congratulations. Don't worry about the cost, it's hardly noticeable in the first five years (unless your one of the ones who insist on buying everything new from mothercare). Nappies and milk are cheap. Pushchairs can be had on eBay amongst much other hardly used stuff kids grow out of rapidly.

Unless however you need 2 incomes to pay the bills and your going to be using paid childcare - that's more expensive than private schooling!

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First child? Congratulations. Don't worry about the cost, it's hardly noticeable in the first five years (unless your one of the ones who insist on buying everything new from mothercare). Nappies and milk are cheap. Pushchairs can be had on eBay amongst much other hardly used stuff kids grow out of rapidly.

Unless however you need 2 incomes to pay the bills and your going to be using paid childcare - that's more expensive than private schooling!

Thanks! Yes, he's our first.

Already got 'the kit' from donations and out of savings so nothing more to buy now. We're overflowing with other people's stuff!

Childcare will be covered by changes to our and families' working patterns so no expenditure there. We could quite comfortably live on my salary alone but I'd rather not as that means we'd be saving much less.

No offence to those who do use childcare, but to me it seems mental to go to work to then pay someone else you don't know to look after your child...

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i have over paid around 5% this year and it reduced my monthly payment by £25 a month. I plan to do the same this year.

As previous poster have said the extra free money saved on the month may be more important in 5 years time.

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No offence to those who do use childcare, but to me it seems mental to go to work to then pay someone else you don't know to look after your child...

They do more than 'look after', there is structured learning and the social side of a setting that young ones won't get unless your family is very close and happen to have lots of kids around the same age as well as someone with a background in early years development. In preparation for going to school there are many benefits to spending some time in nursery, at least a few days a week.

Maybe slightly biased as my partner is a early years teacher, preschool room leader, forest school leader and nearly finished with her masters in early years development. I've had to proof read quite a lot of material on the subject.

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They do more than 'look after', there is structured learning and the social side of a setting that young ones won't get unless your family is very close and happen to have lots of kids around the same age as well as someone with a background in early years development. In preparation for going to school there are many benefits to spending some time in nursery, at least a few days a week.

Maybe slightly biased as my partner is a early years teacher, preschool room leader, forest school leader and nearly finished with her masters in early years development. I've had to proof read quite a lot of material on the subject.

Yes indeed, it's a pity for those who are forced into work when they'd like to be at home but the provision and learning environment at a decent place can be way more stimulating than a stay at home parent can realistically reproduce(I say this as a stay at home parent). Reckon I'll be look for a job in the near future to put Jr in a decent nursery, I've done the first 1,000 days or so and have hopefully laid the foundations for a great relationship, now I feel the benefits of letting the experts do their stuff are hard to ignore, or justify ignoring. Particularly since kiddie is now at an age where collaborative aspects to playing are becoming more apparent, up until recently it was very independent. It can be a positive choice!

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We've just re-mortgaged with Barclays. Fixed for 5 years at 2.53% (75% LTV) seemed the best option on balance- trackers seem to be for short periods and mainly have large application fees.

I asked the mortgage advisor (Young chap) if he was busy with new applications - he said it had gone quiet in the last couple of weeks, he "didn't know why, maybe the brexit thing"

He also mentioned that he had 60% LTV mortgage himself, but "Didn't own anywhere near 40% of his house, but he knew of a loophole/backdoor to getting a lower LTV band than what should of been allowed" surely this is mortgage fraud??

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We've just re-mortgaged with Barclays. Fixed for 5 years at 2.53% (75% LTV) seemed the best option on balance- trackers seem to be for short periods and mainly have large application fees.

I asked the mortgage advisor (Young chap) if he was busy with new applications - he said it had gone quiet in the last couple of weeks, he "didn't know why, maybe the brexit thing"

He also mentioned that he had 60% LTV mortgage himself, but "Didn't own anywhere near 40% of his house, but he knew of a loophole/backdoor to getting a lower LTV band than what should of been allowed" surely this is mortgage fraud??

Ultimately it is fraud, but its the bank's obligation to find it and as with liar loans perhaps they don't want to because lending is their game and the government has given them a free pass.

In terms of LTV it is all dependent on what other houses were sold for recently AND the bank appointed surveyor. IF you can give the surveyor the information he needs to make "the right" informed decision he will use it. Much the same way that most journalists simply copy and paste PR information and call it news. They want an easy life, if you can give them the information they need to back up any valution they are covered and since its rarely questioned everyone is a winner - until the ponzi collapses.

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An update, if anyone's interested:

Saw gilt yields rising so got on the case. Sorted a 10 year fix at 2.49% with no fees; our LTV was lower than I thought so we got HSBC's lower rate. Thirty year term to get minimum contractual payment, but still paying what we used to so we're overpaying a couple of hundred a month (even though wife on maternity). Gives us a bit of leeway in case circumstances change. No problem with transferring it if we want to move, and can overpay by up to 10% a year of the initial amount borrowed.

Pretty pleased we managed to get this arranged as some places are raising rates on fixes this last week.

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