Mortgages - Page 2

Mark · 26-03-2009, 00:27

Still pondering. I've recognised the potential danger in the tracker (1% rise in base rate would wipe out all the savings - something that's entirely possible even if CPI went in the wrong direction this month).

However, I can't break the deadlock between the other two. It all depends on how much of any future rate rises they pass on (they only passed on 1% on the way down, so I wouldn't expect them to pass it all on on the way back up). And, to add to the confusion, I'm also trying to figure out if going the Offset mortgage route would be better.

So, does anyone know good places to look for advice on mortgages? I realise it's pretty much going to be guesswork given the unprecedented nature of the economic situation, but I'd like it to be at least informed guesswork.

Thanks all for bearing with my mortgage ponderings. Indecisive by name, indecisive by nature.

Mark · 27-03-2009, 16:51

Just been offered a 4.59% offset fixed to 30.06.2014. That'll do me. Game over. Thanks for all the help.

Admiral Huddy · 27-03-2009, 17:16

Puzzled as to why you want fixed rate at the moment?

Mark · 27-03-2009, 17:35

Which way are rates likely to go in, say, 12 months? There's no realistic scope for any further rate cuts from the BofE, so the only way rates are going to go down further is if LIBOR rates improve, which given the state of the market seems unlikely (in fact, some lenders are putting up their rates already). Where we go after this is anyone's guess, but an unhealthy dose of stagflation (as happened in the 80s) is a possibility, so if rates are unlikely to go down by more than .5%, and there is some upside risk, then I thought it best to lock in near the bottom.

If I had a bigger mortgage, I'd probably do something different, but on £80k I'm just at the point where the costs of getting a good deal elsewhere (it typically requires £995 fees to do that at the moment) wipe out most or all of any savings that can be made.

Or have I got this all completely wrong? (I've not signed anything yet)

Admiral Huddy · 27-03-2009, 17:46

Well I can't see them going up in the next year and even if they do even a few % is still very low. Personally, I would get yourself a variable low rate in which you can overpay, say on the basis of a 5%. That way, you'll reduce the term and save £££££ on interest should the rate rise again and if they do rise again, then it doesn't affect your monthly payments, only the amount you overpaying.

ING do a good flexible mortgage, but they may have stopped them for this very reason.

How much are you current monthly payments if you don't mind me asking?

Mark · 27-03-2009, 18:04

£800, and that'll not be going down as a result of the lower rate. Also, I have no savings in the bank. None. In fact, I've never had any savings. In the current climate I think you'd agree that's risky and I need to fix it, so priority is debts first, then savings, then increasing the mortgage payment.

Oh, and because it's an offset account, I'll be getting equivalent of 4.59% net on any savings I do put aside once the debts are gone*. Try finding that on the high street.

I don't think it's a bad deal.

* Some of the money currently used to clear debts will get saved, some will go on much-needed house repairs, some on fun things.

27-03-2009, 17:16	#13
Admiral Huddy HOMO-Sapien Join Date: Jun 2006 Location: Chelmsford Posts: 6,692	Puzzled as to why you want fixed rate at the moment? __________________ I just got lost in thought.. It was very unfamiliar territory. Techie Talk \| My gaming Blog \| PC spec \| The Admirals log

27-03-2009, 17:35	#14
Mark Screaming Orgasm Join Date: Jul 2006 Location: Newbury Posts: 15,194	Which way are rates likely to go in, say, 12 months? There's no realistic scope for any further rate cuts from the BofE, so the only way rates are going to go down further is if LIBOR rates improve, which given the state of the market seems unlikely (in fact, some lenders are putting up their rates already). Where we go after this is anyone's guess, but an unhealthy dose of stagflation (as happened in the 80s) is a possibility, so if rates are unlikely to go down by more than .5%, and there is some upside risk, then I thought it best to lock in near the bottom. If I had a bigger mortgage, I'd probably do something different, but on £80k I'm just at the point where the costs of getting a good deal elsewhere (it typically requires £995 fees to do that at the moment) wipe out most or all of any savings that can be made. Or have I got this all completely wrong? (I've not signed anything yet) Last edited by Mark; 27-03-2009 at 17:40.

27-03-2009, 17:46	#15
Admiral Huddy HOMO-Sapien Join Date: Jun 2006 Location: Chelmsford Posts: 6,692	Well I can't see them going up in the next year and even if they do even a few % is still very low. Personally, I would get yourself a variable low rate in which you can overpay, say on the basis of a 5%. That way, you'll reduce the term and save £££££ on interest should the rate rise again and if they do rise again, then it doesn't affect your monthly payments, only the amount you overpaying. ING do a good flexible mortgage, but they may have stopped them for this very reason. How much are you current monthly payments if you don't mind me asking? __________________ I just got lost in thought.. It was very unfamiliar territory. Techie Talk \| My gaming Blog \| PC spec \| The Admirals log Last edited by Admiral Huddy; 27-03-2009 at 17:50.

27-03-2009, 18:04	#16
Mark Screaming Orgasm Join Date: Jul 2006 Location: Newbury Posts: 15,194	£800, and that'll not be going down as a result of the lower rate. Also, I have no savings in the bank. None. In fact, I've never had any savings. In the current climate I think you'd agree that's risky and I need to fix it, so priority is debts first, then savings, then increasing the mortgage payment. Oh, and because it's an offset account, I'll be getting equivalent of 4.59% net on any savings I do put aside once the debts are gone. Try finding that on the high street. I don't think it's a bad deal. Some of the money currently used to clear debts will get saved, some will go on much-needed house repairs, some on fun things. Last edited by Mark; 27-03-2009 at 18:09.

26-03-2009, 00:27	#11
Mark Screaming Orgasm Join Date: Jul 2006 Location: Newbury Posts: 15,194	Still pondering. I've recognised the potential danger in the tracker (1% rise in base rate would wipe out all the savings - something that's entirely possible even if CPI went in the wrong direction this month). However, I can't break the deadlock between the other two. It all depends on how much of any future rate rises they pass on (they only passed on 1% on the way down, so I wouldn't expect them to pass it all on on the way back up). And, to add to the confusion, I'm also trying to figure out if going the Offset mortgage route would be better. So, does anyone know good places to look for advice on mortgages? I realise it's pretty much going to be guesswork given the unprecedented nature of the economic situation, but I'd like it to be at least informed guesswork. Thanks all for bearing with my mortgage ponderings. Indecisive by name, indecisive by nature.

27-03-2009, 16:51	#12
Mark Screaming Orgasm Join Date: Jul 2006 Location: Newbury Posts: 15,194	Just been offered a 4.59% offset fixed to 30.06.2014. That'll do me. Game over. Thanks for all the help.