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Woolwich Launch A Ten-year Fixed-rate Mortgage Launched

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"In a quite stunning move, The Woolwich have launched a ten-year fixed-rate mortgage has been announced with an interest rate of 4.67 per cent.

This indicates not only the confidence the Woolwich must have that interest rates will be devoid of volatility over the next decade, but also just how competitive the much lauded long term mortgage micro-industry could become."

http://firstrung.co.uk/articles.asp?pageid...articlekey=1263

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clever move, with the yeild curve predicting interest rates to fall over the medium term. I would like to be a buyer of fixed income in this environment.

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"In a quite stunning move, The Woolwich have launched a ten-year fixed-rate mortgage has been announced with an interest rate of 4.67 per cent.

This indicates not only the confidence the Woolwich must have that interest rates will be devoid of volatility over the next decade, but also just how competitive the much lauded long term mortgage micro-industry could become."

http://firstrung.co.uk/articles.asp?pageid...articlekey=1263

Whats the get out clause should you need to sell up/pay off the mortgage due to unavoidable situations -thats the question!!!

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"In a quite stunning move, The Woolwich have launched a ten-year fixed-rate mortgage has been announced with an interest rate of 4.67 per cent.

This indicates not only the confidence the Woolwich must have that interest rates will be devoid of volatility over the next decade, but also just how competitive the much lauded long term mortgage micro-industry could become."

http://firstrung.co.uk/articles.asp?pageid...articlekey=1263

Remember they will sell the debt to the money markets. The main risk they take is the possibility of bad debt. But if that is a big risk, they will buy indementy insurance.

I wonder what the redemption penalties are if you want to sell up or move. Although, overall it sounds like a good deal!

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Remember they will sell the debt to the money markets. The main risk they take is the possibility of bad debt. But if that is a big risk, they will buy indementy insurance.

I wonder what the redemption penalties are if you want to sell up or move. Although, overall it sounds like a good deal!

I know one of the guys in Barclays that heads up the securitised and structured funding, not sure if Woolwich are one of his clients....

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It looks like the West Bromwich are offering the same kind of thing:-

West Bromwich Building Society 10 Year Fixed Mortgage Details

Early redemption penalties are: "Interest to the end of the month in all cases plus, until 30/03/2012, 6% of amount to be repaid, followed by 5% until 31/03/2013, 4% until 31/03/2014, 3% until 31/03/2015, then 2% until 31/03/2016."

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Thinking on this a little further I have to admit to being rather tempted by these 10-year fixed offers. In the current economic climate a fixed 4.7-ish% deal for 10 years sounds the mutts nuts! Personally speaking the only down side I can see is if I need to cash in during the fixed term. And as I've just hit a landmark figure in my savings...

... dammit! I'll have to sleep on this and think it through with a clear head!

Anyone got a crystal ball going spare?

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Bah, they'll probably just sell the loans to our pension funds...

Thats exactly where the money's coming from. Borrowed by the goverment with promise to pay bonds of some type 'gilts' and lent to banks for lending. The pension deficit could go into orbit. The return for the pension company is garanteed although only 1 or 2%, all the risk is with the borrower. Neat!

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That is so typical to offer what appears a good deal when they must think the overall trend on interest rates will be down over the next 10 years.

No because fixed rate mortgages don't work like that. Fixed rate mortgages are sold as fixed length investments to pensions firms. With gilts currently being auctioned on a ten year basis at 3.5%, 4.5% for a mortgage backed investment looks like a decent deal to a pension fund.

Personally I think its a good deal. Mortgage rates will never dip below 2.5% (look at the terms of a tracker mortgage and you'll see words to that effect inside the T+Cs) and even if rates do drop with the increasing risk of negative equity and defaults the increasing risk will ensure that mortgage rates don't fall by the same rates.

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When i get round to it ill probably taking out the 10 year fixed from yorkshire building society. Its just a shame i cant pay a few quid now to reserve the right to the mortgage deal in a years time or so. 4.69% seems like a damn good deal bit of a f*cker about them pesky house prices though.

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With marriages not lasting long nowadays , a lot of families are going to suffer with a 10 year fixed rate mortgage once divorces are filed. I would love to see what the penalty is for getting out of the 10 year term.

I thought a five year term was bad enough but 10 years ..... Wow

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With marriages not lasting long nowadays , a lot of families are going to suffer with a 10 year fixed rate mortgage once divorces are filed. I would love to see what the penalty is for getting out of the 10 year term.

I thought a five year term was bad enough but 10 years ..... Wow

Penalties are quite resaonable imho, sliding scale from 4%, i like the option of being able to overpay by 10% pa on a 4.69% 10 year fixed without charges and for what its worth im not married :)

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"In a quite stunning move, The Woolwich have launched a ten-year fixed-rate mortgage has been announced with an interest rate of 4.67 per cent.

This indicates not only the confidence the Woolwich must have that interest rates will be devoid of volatility over the next decade, but also just how competitive the much lauded long term mortgage micro-industry could become."

http://firstrung.co.uk/articles.asp?pageid...articlekey=1263

sure in america you can get 30 year fixed mortgages. 10yr fix rate of 4.7% does indicate interest rates arent expected to rise much over next 10 years.rates could drop dramatically if theres a HP crash and then your stuck with higher rate.looking at 10 year yields rates wont rise much in a begnin enviroment,will fall a lot in a recession and will only rise a little if gdp growth picks up -in which case wages should rise at higher rate- so i'd say stay with tracker or variable.

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sure in america you can get 30 year fixed mortgages. 10yr fix rate of 4.7% does indicate interest rates arent expected to rise much over next 10 years.rates could drop dramatically if theres a HP crash and then your stuck with higher rate.looking at 10 year yields rates wont rise much in a begnin enviroment,will fall a lot in a recession and will only rise a little if gdp growth picks up -in which case wages should rise at higher rate- so i'd say stay with tracker or variable.

Nothing personal but your summary is naive and ignores history and the fact that rate increases (esp big ones) are by their very nature unpredictable. And with current rates at historic lows from a 50 yr perspective the upside risk is nothing like as safe as you make out over 10 yrs! Rates to 6% from 4.5% (were that to happen for any reason over next several years) would blow out most peoples affordability. 10 year yields are the markets current view of the future - if that were always right we'd all be laughing. We have an inverted yield curve but that is unusual - it will change back in future.

No, by any normal standard these are great rates and a great opportunity if you can stick with them and not break them (although they will have no bearing on the value of your house after 10 yrs!). If inflation picks up steam over the next few years interest rates will rise and people will not believe these rates were once available.

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Nothing personal but your summary is naive and ignores history and the fact that rate increases (esp big ones) are by their very nature unpredictable. And with current rates at historic lows from a 50 yr perspective the upside risk is nothing like as safe as you make out over 10 yrs! Rates to 6% from 4.5% (were that to happen for any reason over next several years) would blow out most peoples affordability. 10 year yields are the markets current view of the future - if that were always right we'd all be laughing. We have an inverted yield curve but that is unusual - it will change back in future.

No, by any normal standard these are great rates and a great opportunity if you can stick with them and not break them (although they will have no bearing on the value of your house after 10 yrs!). If inflation picks up steam over the next few years interest rates will rise and people will not believe these rates were once available.

people say rates are at historic lows and they are in nominal terms but in real terms rates are highish.when nominal interest rates were 15% inflation was about 17%.real interest rates are around 2.5%now.

maybe i am naive though,only a young lad! havent lived through many recessions!

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Nothing personal but your summary is naive and ignores history and the fact that rate increases (esp big ones) are by their very nature unpredictable. And with current rates at historic lows from a 50 yr perspective the upside risk is nothing like as safe as you make out over 10 yrs! Rates to 6% from 4.5% (were that to happen for any reason over next several years) would blow out most peoples affordability. 10 year yields are the markets current view of the future - if that were always right we'd all be laughing. We have an inverted yield curve but that is unusual - it will change back in future.

No, by any normal standard these are great rates and a great opportunity if you can stick with them and not break them (although they will have no bearing on the value of your house after 10 yrs!). If inflation picks up steam over the next few years interest rates will rise and people will not believe these rates were once available.

what about if your job ******s off east and you end up in a crappy job or on the dole.

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I think the thing with this deal is that it allows extremely limited overpayments, only about 5% a year. That isn't much.

If they allowed unlimited overpayments on such a deal, my own personal calculations indicate that might be worth it to buy now.

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I think the thing with this deal is that it allows extremely limited overpayments, only about 5% a year. That isn't much.

If they allowed unlimited overpayments on such a deal, my own personal calculations indicate that might be worth it to buy now.

Its actually 10%. I'm going to switch to one over the next month or so from a fully offset mortgage. Reasons are:-

1) My wife is currently not working so I should get a full 5% from our savings.

2) She wants an extension and I'm going to take the money for it now while loans are still easy to get.

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what about if your job ******s off east and you end up in a crappy job or on the dole.

That is a risk, true. Its about balance. One could argue that if you become unemployed when rates have increased then a lower 10 yr fix may avoid you having to sell your home as you may be able to service the debt more easily. Of course you have to weigh these things up but how many buyers today think about unemployment risk! Taking a tracker or variable and then becoming unemployed is a problem if rates have gone/go up. The premium you pay for the certainty is the prepayment fee. The downside risk is that rates go lower for a long time (dubious and are probably subject to a floor anyway as far as mortgage providers are concerned).

people say rates are at historic lows and they are in nominal terms but in real terms rates are highish.when nominal interest rates were 15% inflation was about 17%.real interest rates are around 2.5%now.

True also but the qu is about hedging one of those variables, the debt service rate. If inflation picks up (and if the far east/China/India etc experience the capitalist booms and rise in living standards/costs of living we have seen in the west over the last 10-20 yrs then where is the low cost base which has given us much of the deflation offsetting our otherwise inflating native western service/manufacturing cost base? I see inflation and interest rates bouncing higher than 2%/4.5% at some stage over the next 10 yrs. Having a low fixed rate would be good in those circumstances.

In the early 80s I think my parents (burnt by the 70s interest rates or thought they were - had not realised what inflation had done for them!) took a 10 yr fixed rate with the Halifax at, wait for it, 10%. It was a hedge to avoid the downside not to seek the finest possible rate to max out their mortgage amount. They paid more than variable for several years but I can tell you they were sitting pretty in 1989/90/91 when rates went to 13-14%!

Edited by Tempest

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Whats the get out clause should you need to sell up/pay off the mortgage due to unavoidable situations -thats the question!!!

4% redemption penalty, I believe. A lot.

10 year deal though will tempt those who are not sure whether to STR.

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  • 301 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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