hamster Posted 21 November, 2008 Share Posted 21 November, 2008 I am off to pub tonight to congratulate myself on securing new mortgage rate of 4.94% fixed for 3 years, that is good I reckon. I know there may be slightly better rates in the mainstream market, but our needs are a bit more complicated, hence, I am happy to sign. Unless of course - as Esther would say - you know different. Link to comment Share on other sites More sharing options...
RoswellSaint Posted 22 November, 2008 Share Posted 22 November, 2008 I am off to pub tonight to congratulate myself on securing new mortgage rate of 4.94% fixed for 3 years, that is good I reckon. I know there may be slightly better rates in the mainstream market, but our needs are a bit more complicated, hence, I am happy to sign. Unless of course - as Esther would say - you know different. What happens to the rate after 3 years? Make sure that you will be able to afford it then. That is what has got so many people into trouble over here. Link to comment Share on other sites More sharing options...
hamster Posted 22 November, 2008 Author Share Posted 22 November, 2008 What happens to the rate after 3 years? Make sure that you will be able to afford it then. That is what has got so many people into trouble over here. Rorwell, it isn't that big a mortgage to be honest, but this time last month, we thought we were gonna get really stung. After three years, we are planning to downsize and hopefully have NO mortgage. It's part of a 5 year plan that we have, and fingers crossed, so far so good. I wouldn't necesarily say that we've been lucky in property, but we have definitely made some good moves. We are both part time already following our last move, so if I can be mortgage free before I reach my half-century I will be pretty chuffed with my lot. Link to comment Share on other sites More sharing options...
Seaford Saint Posted 23 November, 2008 Share Posted 23 November, 2008 I am off to pub tonight to congratulate myself on securing new mortgage rate of 4.94% fixed for 3 years, that is good I reckon. I know there may be slightly better rates in the mainstream market, but our needs are a bit more complicated, hence, I am happy to sign. Unless of course - as Esther would say - you know different. My good lady wife has asked, after I read out your message, how much did he have to pay to get that rate? Could you enlighten me please? Thanks Link to comment Share on other sites More sharing options...
hamster Posted 24 November, 2008 Author Share Posted 24 November, 2008 My good lady wife has asked, after I read out your message, how much did he have to pay to get that rate? Could you enlighten me please? Thanks Well, TBH we've have been a bit naughty this time around TTV. We decided to treat ourselves to a few treats and told them that we are gonna do a few 'home improvements' so released a bit of equity to pay for them. Don't worry, we can afford it as we've done better than we thought we would, amazing really considering the fact that we CAN NOT afford to move at the moment. And no, I am not talking ******, as sure as there are losers, there are always winners too when markets crash The best scenario plan was to move this year and be mortgage free, but, hey ho, life's a ***** and all that. Make hay while the sun shines I say. The deal we got did attract a fee, but due to circumstances beyond our control we had no choice but to pay a fee. That fee is £499, which I tried very hard to get them to drop. However, we decide to add the fee to the mortgage to guarantee that our repayments don't send us both back into full time work. GOLDEN RULE 1 is that you (within reason) can not put a price on 'peace of mind'. If you want any more details PM me, but in all honesty it really isn't that hard to track the deals down. GOLDEN RULE 2 - Whoever you are borrowing from, is borrowing it from someone else, who is borrowing it from someone else ad infinitum. Just track the deal back to the REAL lender, and do the deal with them direct. There are probably people out there reading this, and thinking, there's better deals out there. We HAVE to sign something by the end of the month, hence - this is the best deal for us right now. Anyone PM me, ad I'll send you an absolutely priceless, impartial pdf guide. You need to follow it to the letter, and it WILL save you money next time you renew. That is all H Link to comment Share on other sites More sharing options...
Crouchie's Lawyer Posted 24 November, 2008 Share Posted 24 November, 2008 TBF, if you are looking for good deals, Fixed rates are NOT the way forward at the moment. Everyone's needs are different. A first time buyer for example, will probably be more suited to a fixed rate, knowing what they will pay while they find their feet with household expenses etc. However, with rates as they are currently, and what economists predict will happen next year (down to 1% base rate some have said) I see no other product than a tracker product being the 'best deal' at the moment. My personal advice (I am a qualified mortgage advisor), is that if you can afford payments on a mortgage around the 5-6% mark then go for a tracker. BUT do not take out one with ANY early repayment charges (ERC's). I have just come out of a 3 year 4.89% fixed rate which served me well (being a first time buyer 3 years ago) it has worked out nicely in the sense that rates have always been above 4.89% (pretty much) since I took it out, and now they are lower than this, my rate has ended. I have taken a '0.79% tracker for life' meaning I am currently paying 3.79% and whenever base rate changes, my rate will change striaght away, regardless if the lender wishes to pass on any cuts or not as a tracker is not affected in this way. When rates bottom out at their lowest (and it is impossible to accuratley predict, but economists normally get it about right so just make sure you check economist reports every few months) this will be the ideal time to fix your mortgage as rates should be a lot lower then. At that point, fix it for as long as you care (I personally would look for a 5 year minimum) and sit back and watch as Base Rate increases while you're on your nice low fixed rate! Im not poo pooing your advice Hamster as everyones situation is different. A lot of people like the peace of mind and security a fixed rate offers, but for those who are willing to take serious advantage of the rates out there, look no further than trackers. A word of warning, lenders 'discount' rates maybe slightly more attractive at the moment than tracker rates, however, with a discount rate, this is discounted from the lenders Standard Variable Rate (SVR). The issue at the moment is that lenders are not reducing their SVR's when the BOE is reduced, so if you take a discount rate, you may not get the full (if any) reduction in the BOE fall passed onto you. A tracker is directly linked to the BOE so any reduction will affect your payments straight away. The reason why fixed rates and discounted rates are not as low at the moment is that lenders borrow from each other using a rate called LIBOR (London Inter-Bank Offered Rate). This rate remains stubbornly high at the moment, reflecting the lack of confidence banks have in lending to each other (as they are worried about where the bank they lend their money to will in turn lend it on). This means when BOE reduce their rates, they make a further loss on variable rates. For example... Barclays borrow £100k for Joe Bloggs' Mortgage from HSBC at 5% LIBOR. If they charge 5.25% to the client in the form of a 'Tracker + 2.25%' they are making a profit of .25% on this mortgage. If BOE reduces by 1% down to 2%, the rate the client is paying is only 4.25%. If LIBOR only reduces by 0.5% to 4.5% Barclays are paying 4.50% for the £100k, while only receiving 4.25% so making a 0.25% loss. If this was a discounted rate, lenders do not have to drop their SVR which the mortgage is discounted from, for instance Barclays borrow £100k for Joe Bloggs' Mortgage from HSBC at 5% LIBOR. If they charge 5.25% to the client in the form of a 'SVR - 0.75%' (assuming their SVR is 6%) they are making a profit of 0.25% again like the example above. If BOE then reduces by 1%, the lender is not oblidged to pass this onto the customer. So they are not making a loss, what they are likely to do, is only pass on the saving in the reduction of LIBOR. If LIBOR reduces by 0.50%, then they are now making a 0.75% profit on the mortgage, so they may pass on this saving to the client to maintain their 0.25% profit, however, passing on the full 1% reduction would see them making a bigger loss which is why banks are not doing it. Im sorry about the length of this post, however, hope it helps a few people in making a decision. Before I worked in mortgages, I knew how daunting they were and if it helps a few people out then great. If you have any questions or wanna run anything by me, feel free to drop me a PM. Link to comment Share on other sites More sharing options...
NI76 Posted 24 November, 2008 Share Posted 24 November, 2008 Sorry INS, haven't got pm facility (can't afford the £5 due to the exorbitant mortgage rate I'm paying!). Where did you get your 0.79% tracker as that sounds a seriously good deal? Link to comment Share on other sites More sharing options...
anothersaintinsouthsea Posted 24 November, 2008 Share Posted 24 November, 2008 My last two deals have been brokered by London & Country mortgages. Each time they got me the kind of deal I was looking for. They don't charge as the take commission from the end lender but they are quite transparent about this. Highly recommended. Link to comment Share on other sites More sharing options...
hamster Posted 25 November, 2008 Author Share Posted 25 November, 2008 Sorry INS, I really do not have the time to respond to all of your points. In summary I am not sure that a guarantee of paying any amount (be it 0.79 or any other amount) over the SVR is good advice, especially from anyone purporting to be a self-pronounced 'expert'. It is brokers/experts who are the main problem in my opinion, how is anyone who must recommend the best deal for themselves, going to put there customers needs first? I would advise everyone who is either re-mortgaging or looking for there first mortgage, to read the whole section on mortgages on this site: www.moneysavingexpert.com At the risk of repeating myself, anyone who requests it by PM, I will send you a pdf file explaining all. I do not consider myself an expert, but any savings that we have made have been OURS to enjoy! seriously INS, no offence, but **** the middle men. Link to comment Share on other sites More sharing options...
Crouchie's Lawyer Posted 25 November, 2008 Share Posted 25 November, 2008 Sorry INS, haven't got pm facility (can't afford the £5 due to the exorbitant mortgage rate I'm paying!). Where did you get your 0.79% tracker as that sounds a seriously good deal? HSBC, although they did pull the deal shortly after, but I am unsure what they replaced it with? They seem to be one of the better lenders out there at the moment IMO. Link to comment Share on other sites More sharing options...
Scummer Posted 25 November, 2008 Share Posted 25 November, 2008 However, with rates as they are currently, and what economists predict will happen next year (down to 1% base rate some have said) I see no other product than a tracker product being the 'best deal' at the moment. My personal advice (I am a qualified mortgage advisor), is that if you can afford payments on a mortgage around the 5-6% mark then go for a tracker. BUT do not take out one with ANY early repayment charges (ERC's). One important thing to note is that most trackers have a bottom rate that they won't go below. For example, I currently have a rate of 3.28%, but there is a collared basic interest rate of 3.03% minimum. So if the base rate falls another quarter of a percent, it will be passed on to me, but any further falls will not. Link to comment Share on other sites More sharing options...
Crouchie's Lawyer Posted 25 November, 2008 Share Posted 25 November, 2008 Sorry INS, I really do not have the time to respond to all of your points. In summary I am not sure that a guarantee of paying any amount (be it 0.79 or any other amount) over the SVR is good advice, especially from anyone purporting to be a self-pronounced 'expert'. It is brokers/experts who are the main problem in my opinion, how is anyone who must recommend the best deal for themselves, going to put there customers needs first? I would advise everyone who is either re-mortgaging or looking for there first mortgage, to read the whole section on mortgages on this site: www.moneysavingexpert.com At the risk of repeating myself, anyone who requests it by PM, I will send you a pdf file explaining all. I do not consider myself an expert, but any savings that we have made have been OURS to enjoy! seriously INS, no offence, but **** the middle men. No offence taken H, but the world of mortgages is a very complicated one, and the 'middle man' often offers a service which explains the in's and out's of a certain deal. Its all well and good doing it yourself, even with a guide, however, do you really understand all of the jargen? I mean, if it were this simple, then sureley everyone would be CeMAP qualified? There will always be people who are financially astute and lucky to boot, managing to get themselves a good deal, even if they have limited knowledge of the mortgage market/products, but for every one person who does this, there are tens if not hundreds who just renegotiate a deal with their current lenders because they are not aware of what is available to them, unsure of how to get, or too lazy/dont have time to change. The above part of your quote which i have highlighted (and there is no offense intended here) just goes to show the misunderstanding people have. I said a tracker rate is above the Bank of England Base Rate, not the lenders SVR as you say. I said any rate which follows a lenders SVR is NOT a good thing at the moment. And I currently work in Air Conditioning (although in the process of setting up on my own, but this wont be for a while yet) so am not looking at soliciting business, mearly offering a few helpful tips to fellow Saints fans! I have nothing to gain from this and you will find that the FSA strictly monitors brokers, stopping practises like favouring a particular lender due to higher commission anyway. This stopped years ago and goes to show how much bad press can affect an industry. Capital One for example always rave on about their fraudulent use policy whereby you will not be held liable for money fruadulently added to your credit card. This is a spin on the general public opinion. Most if not all banks will do this, but they do not actively advertise this, meaning people will take out a Capital One card, thinking they are safer with it. And to top it off, most high street lenders pay the same commission anyway, so a recommendation is based on needs and circumstances as well as best product, rather than because it will put extra £££'s into people pockets. Being completely honest, prime, high street mortgages are not very commission friendly anyway, its actually the insurances brokers make their money on, not the mortgages. The rate I pay is 0.79% above base rate. The rate you will be paying, albeit fixed for 3 years is 4.94%. Base rate would have to increase by 5 points for me to be paying a higher percentage than you, and although base rate has recently fell by 1.5% and prior to that 0.5%, generally, it only decreases/increases at 0.25% a time unless something major needs doing (like shown recently). My advice was that I recommend people to take out a tracker at the moment with no ERC's and sit tight watching what banks do with their Fixed rates (which is dependant on the LIBOR rate, which in time, should hopefully come down, meaning fixed rates should come down too). I see (along with hundreds of economists) interest rates going nowhere but down next year as the decrease in VAT is not going to get people spending as much as the government think it will or hope it will. The only way to encourage spending is to reduce rates so people have more money in their pockets (if their mortgages go down) and discourage people saving (as the interest rate received will be cr*p). The second part to my advice is that once rates do get very low (and it is a question of timing, but even if you get it slightly wrong, you will still be better off than fixing it now) to fix it at this point. using random figures, it rates fall to say 2.5%, ill pay paying 3.29%. If there is a fixed rate available then of 3.94% ill take that. Ill then have had the advantage of not only having reductions in my payments when rates fall, but fixing it at a lot lower percentage than rates available at the moment. As I mentioned previously, different people have different situations so some people would be suited to a fixed rate, but IMO, if you have no preference for a fixed rate, then trackers are the way forward for the moment. No offense, but dismissing advice from someone who has market knowledge and experience is very niave. You wouldnt dismiss the help from a dentist and drill your own teeth would you? Even if you had a guide on how to do it. 4.94% is a good fixed rate yes, but based on how rates have been/state of the economy over the last year. If 6 months ago, you offered me a 4.94% 3 year fixed rate, I would have snapped your finger off quicker than anything, however, I have been very lucky personally with rates changing just before my fixed rate came to an end and as such have had a better look at what the economy is doing/going to do in order to base my decision on what I think will be a beneficial rate for me. Ask me a year ago and I would have told you I would never take a fixed rate, which goes to show, how much i think I will benefit by doing this. Like I said, i have no gain from giving this advice, merely helping fellow Saints fans, and anyone with any other questions, feel free to PM me, or leave a message on here. Ben Link to comment Share on other sites More sharing options...
Crouchie's Lawyer Posted 25 November, 2008 Share Posted 25 November, 2008 One important thing to note is that most trackers have a bottom rate that they won't go below. For example, I currently have a rate of 3.28%, but there is a collared basic interest rate of 3.03% minimum. So if the base rate falls another quarter of a percent, it will be passed on to me, but any further falls will not. Sorry mate but this is wrong. Most Trackers do not have a base cap. Although I feel we may see a lot more of this in the coming months with lenders not wanting to lose more money borrowing £x at x% LIBOR and having to lend it on at a lot lower rate all because the BOE has reduced and LIBOR hasnt. My tracker has no bottom cap (Ooh err), it may well be that I have been lucky, but my advice would be to try and find one without a base cap. Although the rate you are paying is very low (0.28% above Base) so it may well be that the benefit you get is a lower rate (0.28% above) but the fallback is that there is a bottom line cap? Link to comment Share on other sites More sharing options...
Crouchie's Lawyer Posted 25 November, 2008 Share Posted 25 November, 2008 A brief look at the market (I just checked HSBC, Abbey, Halifax, C&G, Woolwich, Alliance & Leicester, Chelsea & Nationwide) shows that since the BOE has been reduced by 1.5%, a lot of lenders have pulled all their tracker rates which are anything below 1% above base (if that makes sense) and replaced them with quite high rates. Lenders are discouraging clients choosing BOE trackers as they know they will make a loss on the mortgages if BOE continues to fall. They are doing this by trying to increase the initial rates, although there are still some bargains to be had out there, especially if you have a lot of equity. They are trying to get people to take out fixed rates so they can budget their money accordingly and benefit in any reduction in LIBOR while not having to pass interest rate cuts onto those on fixed rates. Abbey offer a 2 year fixed rate of 4.49% with a £995 fee at 60% LTV (Loan to Value) or 4.54% at 70% LTV with the same fee. Alliance & Leicester are offering a 4.49% 2 year fixed for up to 60% LTV with a 1% (of the amount you borrow) fee and a 4.79% 2 year fixed for up to 75% LTV with a 0.75% arrangement fee if you have or take out one of their Premier Accounts. The Woolwich have a few good ones too of note, namely a 3.99% fixed rate for 1 year, then tracks the barclays base rate (would need to check if this changes in line with the bank of england base rate) at 1.99% up to 60% LTV with a £995 fee. Or 4.49% fixed for a year, then 1.99% above BBBR for up to 70% LTV with a £995 fee (or no fee if you dont wanna pay a fee and up to 60% LTV) Lowest Term tracker I can find, is still with HSBC at 0.99% above Base, but requires 40% equity in the property, and has a £995 fee. This has changed from the, up to 90% LTV with a £599 fee for a 0.79% term tracker I got a few weeks ago. Hope this info helps people Link to comment Share on other sites More sharing options...
Crouchie's Lawyer Posted 4 December, 2008 Share Posted 4 December, 2008 (edited) Just a quick one guys if you havent heard. There is a good chance BOE will fall by a further 1% today! Im McLovin it at the moment. I have reduced my mortgage term by 2 years and (if base rate does fall to 2%) will be saving £140 p/m compared to my payments on my previous fixed rate of 4.89%! Long may base rate stay low! Edited 4 December, 2008 by Im_no_sinner Link to comment Share on other sites More sharing options...
OldNick Posted 4 December, 2008 Share Posted 4 December, 2008 Just a quick one guys if you havent heard. There is a good chance BOE will fall by a further 1% today! Im McLovin it at the moment. I have reduced my mortgage term by 2 years and (if base rate does fall to 2%) will be saving £140 p/m compared to my payments on my previous fixed rate of 4.89%! Long may base rate stay low!are you sure you do not have a limit how low the interest you pay goes. If it has no floor lmit then you have done well. Link to comment Share on other sites More sharing options...
Crouchie's Lawyer Posted 4 December, 2008 Share Posted 4 December, 2008 are you sure you do not have a limit how low the interest you pay goes. If it has no floor lmit then you have done well. Nope, no floor limit. Banks and Building Scoeity (Namely Nationwide and HBOS) have only recently imposed these knowing BOE would fall further and they would make a heavier loss on their tracker mortgages (while LIBOR remains stubbornly high). I think its quite funny that Nationwide, the bank which plays on all the negative points of other banks (which are mainly common myths anyway) are one of the only banks employing this sly tactic. Would be quite funny to see another mortgage company come out with a 'p!ss take' TV advert Nationwide style, saying how their trackers dont have low-caps! Link to comment Share on other sites More sharing options...
Scummer Posted 4 December, 2008 Share Posted 4 December, 2008 Nope, no floor limit. Banks and Building Scoeity (Namely Nationwide and HBOS) have only recently imposed these knowing BOE would fall further and they would make a heavier loss on their tracker mortgages (while LIBOR remains stubbornly high). I think its quite funny that Nationwide, the bank which plays on all the negative points of other banks (which are mainly common myths anyway) are one of the only banks employing this sly tactic. Would be quite funny to see another mortgage company come out with a 'p!ss take' TV advert Nationwide style, saying how their trackers dont have low-caps! Nationwide have had this collar for years, it's not a new thing. It's likely that I'll be on 3.03% (my collar) after today, which is still a pretty low rate. Up to a million people on trackers won't get the full benefit of any cut today: http://www.telegraph.co.uk/finance/economics/interestrates/3544311/One-million-homeowners-with-mortgage-collars-wont-benefit-from-rate-cut.html Link to comment Share on other sites More sharing options...
Crouchie's Lawyer Posted 4 December, 2008 Share Posted 4 December, 2008 Nationwide have had this collar for years, it's not a new thing. It's likely that I'll be on 3.03% (my collar) after today, which is still a pretty low rate. Up to a million people on trackers won't get the full benefit of any cut today: http://www.telegraph.co.uk/finance/economics/interestrates/3544311/One-million-homeowners-with-mortgage-collars-wont-benefit-from-rate-cut.html Thats still a very good rate yes. Would also mean that if you were planning on fixing your deal when rates bottom out, you may find you get a cheaper rate and payments reduce (say if you got a fixed rate around 2.5% hypothetically speaking). Sadly, lenders have got wise about what rates everyone are looking for at the moment and tracker rates being offered as of today are not brilliant unless you have atleast 30-%-40% equity! Link to comment Share on other sites More sharing options...
Crouchie's Lawyer Posted 4 December, 2008 Share Posted 4 December, 2008 My mortgage is with HSBC, I dont think they employ a collar on their tracker which is currently 1.64% above BOE for the life of the mortgage with no ERC's, but with a 40% deposit. Unfortunately, it was previously a 10% deposit 0.79% tracker for life with a cheaper set up fee of £599 too (Now £995 I think) Link to comment Share on other sites More sharing options...
Scummer Posted 4 December, 2008 Share Posted 4 December, 2008 Thats still a very good rate yes. Would also mean that if you were planning on fixing your deal when rates bottom out, you may find you get a cheaper rate and payments reduce (say if you got a fixed rate around 2.5% hypothetically speaking). Sadly, lenders have got wise about what rates everyone are looking for at the moment and tracker rates being offered as of today are not brilliant unless you have atleast 30-%-40% equity! I think I'm due to remortgage next summer (I've got two elements to my mortgage at the moment, part fixed part tracker as I moved house during my fixed period), so yeah I'd probably look to fix at that point. I've got a decent chunk of equity, so I ought to have some of the better deals available to me. Link to comment Share on other sites More sharing options...
Crouchie's Lawyer Posted 4 December, 2008 Share Posted 4 December, 2008 I think I'm due to remortgage next summer (I've got two elements to my mortgage at the moment, part fixed part tracker as I moved house during my fixed period), so yeah I'd probably look to fix at that point. I've got a decent chunk of equity, so I ought to have some of the better deals available to me. Yeah, you should have. By which time LIBOR should (hopefully) have caved in and followed suit to a more reasonable level, which should mean fixed rates will be a lot lower too. PM me at the time and ill look about for you if you want. Link to comment Share on other sites More sharing options...
Scummer Posted 4 December, 2008 Share Posted 4 December, 2008 By the way, Halifax have said they will pass this cut on despite their paperwork saying they don't have to. Link to comment Share on other sites More sharing options...
Scummer Posted 5 December, 2008 Share Posted 5 December, 2008 By the way, Halifax have said they will pass this cut on despite their paperwork saying they don't have to. And apparently Nationwide have now said the same thing, which brings my mortgage down to 2.28% Link to comment Share on other sites More sharing options...
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