Thursday, Jan 22, 2015

I am waiting for the 15-20yr fix (Its coming)

This is Money: Nationwide BS launches cheapest ever ten-year fixed rate mortgage at just 2.84%

People here completely fail to understand how profound these low rates are. People are buying homes and paying maybe 30% less than rental on deals like this, with half their payments being re-payments. Plus, the fix means rates do not rise, yet rent rises each yr. Meanwhile debtserf sits on the sidelines paying somebody else's mortgage, supporting buy to let, but he could fix payments for 15yrs, after which time he would own probably 60% of his home. But for those thinking about taking the plunge, variable rates are absolutely plunging. Ours is 1.3% plus base rate. Soon as mortgage providers realise that the next BOE move is DOWN to 0.25% or lower if there is a panic, we will start seeing total flattening of the yield curve and fixed rates better than this, fixed for 15, 20 and even 30yr

Posted by libertas @ 06:50 AM (5053 views)
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1. vinrouge said...

They have existed in France for years, and along with strict affordability criteria have lead to a stable and reasonably priced housing market. No bubbles here. Why would anyone in their right mind commit to buy over 25 years, even at low interest rates, with the current toppy prices demanded.

Thursday, January 22, 2015 07:30AM Report Comment

2. khards said...

If 2.84% isn't low enough for you to fix, what rate would you fix at?

If you're trying to pick the bottom, then you will more than likely fail.

You will sit back watching as 10 year fixed plunge down to 1.5%, then suddenly shoot back up to 3%, you will continue to wait believing they will fall again and rates will be nearer 5%.

You might as well lock in those rates now, 1% isn't diddly in the bigger picture of mortgage interest.

Thursday, January 22, 2015 07:54AM Report Comment

3. Maffo In Oxford said...

I bought mortgage free in Spain thanks ;)

Thursday, January 22, 2015 08:27AM Report Comment

4. reticent said...


Too true. Especially when you're holding out for a 10 year fix at negative interest rates!

Thursday, January 22, 2015 09:20AM Report Comment

5. cornishman said...

I reckon that libertas is a shill - working for the government - in a desperate attempt to keep the show on the road.

Also, I note that any thread that outlines possible different future scenarios to his 'disappears' fairly quickly.

Thursday, January 22, 2015 09:36AM Report Comment

6. debtserf said...

You forgot to mention that inverted yield curves are one of the surest indicators of recession out there. Your obsessive focus on rates fails to factor in the far wider repercussions of an economic unravelling - and it isnt exactly bullish for house prices, or anything else for that matter.

Thursday, January 22, 2015 09:44AM Report Comment

7. reticent said...

@4 That's what annoys me most. You take the time to reason with him and he just posts another article about negative bond yields and adds 5x 1000-word-length comments to it expecting you to read it all. when he hasn't even dignified your attempt to make him consider some of the unpleasant (and frankly, nonsensical) consequences of the scenarios that he's so desperately hoping and didactically insisting are imminent.

@5 Bingo.

Thursday, January 22, 2015 10:00AM Report Comment

8. hpwatcher said...

@6 - the fool is a record that has got stuck. Don't feed him.

Thursday, January 22, 2015 10:54AM Report Comment

9. reticent said...

@7 On the plus side, amidst all the people trying to reason with him, some very good points have been made along the way.

He's inadvertently generated some of the more interesting discussions I've read on HPC in a while, even if they typically take the form of everyone refuting his claims along different lines of reasoning.

Thursday, January 22, 2015 11:36AM Report Comment

10. Rob Mk said...

Banks offer mortgage products depending on their view of future trends.
Long term fixed rates indicate that they consider that the base rate is going down, they want you at this rate as it will be a cheaper rate soon.
I remember capped rate mortgages; these were only on the market when the rate was predicted to go down. They used to appear and disappear very quickly.
Both lender and borrower benefited (sort of), as the rate was capped a few points above base rate and normal variable. If the rate went down you paid less and the bank lost less compared to variable rates. If the rates went up then bank lost, do they ever lose?
To be honest my personality likes long term fixed, lets you plan the future out goings.
Trouble is prices are so high, can I qualify for one of these mortgages and even at this rate can I afford it?

Thursday, January 22, 2015 04:59PM Report Comment

11. bidin'matime said...

Interesting how Libby predicts deflation, but seems unconcerned about how this will affect his ability to pay his fixed rate mortgage... Can someone explain to him that inflation helps borrowers, while deflation (especially when it hits incomes) can finish them.

Thursday, January 22, 2015 04:59PM Report Comment

12. libertas said...

@2, I can fix in the space of 24hrs. Why panic to lock in when I'm paying 1.7% on a variable rate with no early repayments?

Yes, if your mortgage has early re-payment charges, you may be risking by holding back. But do you really think rates will soar to 3% overnight?! More likely that rates will plunge to negative over-night.

As I speak, Swiss 2yr yields at sub MINUS 1%. It will be interesting to see how that impacts the Swiss mortgage market.

Thursday, January 22, 2015 06:55PM Report Comment

13. libertas said...

Bidin'matime, I work for a local authority in a department that is well funded. We got a 2% rise this year plus, I get to move up a career grade each year. Yes, prices are deflating, but my wage goes up by £2k in March, and is scheduled to do similar things every year for the next seven. By which time hopefully I get a promotion to the next career grade and get to do it all over again.

Meanwhile, my mortgage gets cheaper by the hour.

Thursday, January 22, 2015 06:57PM Report Comment

14. mister ed said...

Oh the irony...

A libertarian working for the government and getting huge pay rises at the expense of the taxpayer.

I've heard it all now.

Ho ho ho ho ho ho...

Thursday, January 22, 2015 07:56PM Report Comment

15. Mark said...

Libertas, I'm happy for you, a 2% rise! Like you I work for the government but in the Nhs, a massive uk employer, I am degree educated and work in what used to be a good profession. Unfortunately, due to zero or way below the rate of inflation pay rises over the last 6 years my pay has dropped substantially, my pension deal has been obliterated and we are soon to have unsociable hour enhancements taken away which will be a 10% pay cut on its own.

It's fine and dandy having mortgages at 2% but the masses cannot afford the capital of the loan yet alone the interest so your posts are getting quite irritating because you obviously do not understand how the masses are being affected.

In the short term we get lower and lower rates, I think that's a given, but I would certainly not want to be leveraged up with an overpriced mortgage in a year or two when this thing snaps back.

Thursday, January 22, 2015 08:39PM Report Comment

16. vinrouge said...


It is an expensive laugh for us who live and work in the real world. The @*** Public Sector should be banned.

Thursday, January 22, 2015 09:37PM Report Comment

17. reticent said...


Hey, that gives me an idea for a sitcom... It's a pity that NBC beat me to it.

Thursday, January 22, 2015 10:00PM Report Comment

18. mister ed said...


I think a great idea for a sitcom would be about a guy with delusions of grandeur who lives in a small semi-detached in Enfield.

Each morning he shuffles off to his job in a grey government department, where he puts forward policies about using government money to improve transport links to Enfield so that his house price will rise, all paid for by the taxpayer.

Each night he returns home, undergoes a transformation, and spends hours on the internet posting rambling speculative rants about the world economy and his love of free-market capitalism.

It could be entitled “Dr Bureaucrat and Mr Libertas”

The only question is: who would play the lead?

Thursday, January 22, 2015 10:20PM Report Comment

19. debtserf said...

The punchline is that libertas works in the planning department.

Police are currently investigating the construction of the new M606 motorway from Enfield council to a house just north of the town centre. The motorway ends abruptly at a crazy-paved driveway in front of a delightful early 90s period semi-detached starter home.

Friday, January 23, 2015 12:53AM Report Comment

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