Tradefair & Financials
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24 Jun 09
15:21
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Date Joined:
10 Nov 05
i have a 179k morgage with A&L at .75 above bank of england base rate , should i now**or ride ?
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opions please
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Replies: 81
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All depends on what your loan to value is there are a few decent 5 and 10 year fixes around which I believe offer long term value.
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im on a 0.7 above too. I cant bring myself to**at 5% ! I will be letting mine ride. Good luck
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saving £580 a month at moment so will ride for a while
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I'd definitely** We're printing our way our of trouble and inflation will get out of control a couple of years from now, interest rates will have no choice but to be jacked up
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the question is when will rates go up, (end of this year early next year for me), and how much will arrangement fees be at that point in time (becasue there will be a rush to get one).
A lot depends on how much your affected by the topside potential of SVR. those riding it out now on ultra low rates, are some of the people who will be forced sellers at some point soon imo. |
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still dont no what to do !!!!
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179k what you do for a liveing
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I'd be interested to know what people think I should do too.
I have 21 months left on a**@ 4.95% (it was a 5 year deal). mortgage is 65k left on house worth approx 270k. What rates are going to be available to**in 21 months time (I would probably look for another 5 years) |
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Check what raye you go onto after the lock-in period.
Mine has gone to .99% above BoE for life - so BoE interest rates would have to get to 6% before it would make sense to** |
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i work in the building game
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Stay where you are and use any additional money to reduce balance. BOE base rate isn't going anywhere until July 2010.
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hope you are right ban
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In the scheme of a 5-10Y trade it doesn't really matter if base rate stays low for another 6 or 12 months. What really matters is the GBP swaps rate evolution.
If UK base rates stay "low for long" the the market will likely perceive this as inflationary and factor in higher peak base rates down the curve. This will negatively impact longer term mortgage**rates. My HBOS BOE+51bp comes off mid next year. I will seek the best 5Y**rate from Jan/Feb and look to lock it in ahead of mine moving to the SVR in anticipation of significantly higher rates. I don't discount a peak of 8%+ during that time-frame. Look to reduce the LTV if you can ahead of remortgaging is always a good idea. |
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The bank would like to get base rates to 2.5% assuming CPI is at the 2% target, but it could be 2011 before they achieve it. From their point of view base rates below CPI is not a situation they like. CPI will continue to fall for the rest of the year but when the VAT reduction is removed in January this will add around 1% to CPI. Swap rates will obviously rise but how high before choking demand is open to question.
The crude oil price is important but there is not going to be any pressure on wage inflation for a long time so I can't see where the inflation others fret about is going to come from for the next couple of years. Moreover, those expecting significantly higher base rates in the next few years are forgetting that the bank will be making more use of capital and reserve requirements to control the money supply, rather than the blunt tool of interest rates. Monetary policy in the future will be quite different compared to the past. |
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another month down
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looks loke this could be last month
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DEFINATELY Keep it as it is!
Best Trackers are now in excess of 2% over Bank rate , so you have a great deal. Even if Interest Rates go up you will still be paying less thanm Fixed rates, and there is no guarantee that Fixed rates will get more expensive even if rates increase If I were you , I would pay extra off your mortgage. If you are willing to pay a Fixed at 4% you will be paying 2.8% above what you are paying now. That is an increase of over £400 per month. Why not arrange to uincrease your payment to A & L by the £400. That way you drastically reduce your mortgage balance quickly, and when rates do rise owe less money and pay less interest. DEFIANATELY DO NOT GIVE UP THAT DEAL!!! |
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thanks have been paying the exra money off for nearly a year, get my statement this month so will see how it has worked out
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only**if rates will average higher over the fixed term than you are currently paying.ie if rates are now 5% fixed you need variable rates to average higher than 5% over the fixed term.Also consider that if the variable rate is lower than the fixed rate currently then you are paying lower interest on the highest amount.The highest amout of your loan being day 1.You will owe less in year 4 than year 1.
Only** rates higher than variable if you belive rate rises are imminent and there will be a run of rises. I believe it is difficult to make a strong case for many rate rises in 2010. |
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now they are telling us we are out of the s*it, will they start raising the boe ?
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Dont think so. GDP was 6% lower last year and we have just reported a 0.1% growth in Q4. I am not convinced we are out the woods.
Inflation is the worry, although any increases are hopefully viewed as short term spikes. Remember Banks are not lending Jobs are hard to come by Wages are falling Also remeber your mortgage deal is just 0.75% above base.If rates increase by 2% you will still be paing just 3.25%.!! That is way cheaper than any Fixed rate on offer. 2% rise in rates is a LONG LONG way off Have faith my friend. You have a good deal. Keep overpaying and you will do alright |
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thanks for your advise
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another month held, cant be many more or can there?
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you only have to look at where long term mortgage rates are going (higher) to see where the banks think the market is heading
I would**personally to be on the safe side |
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d13
PLEASE DO NOT BE RIDICULOUS!!!!! I would**If I were paying 3.5% plus!! Poster is paying 0.75% above base rate. Rates would need to increase by 3% before his tracker is worse value than a** There is no way that rates are going up 3% in the next two years, and even if they go up by 4% he will still only be paying 1% more than a Fixed rate. Rates are NOT going up anytime soon. We have another 6 months of this at least , at which point I expect Inflation to be falling once more, and a serious chance of a double dip recession and deflation.Remember , nothing will be done to jeopardise a recovery, and when rates rise they will be raised slowly so that theiven time to recover, and we are given more chance to pay back the massive debt that we have as a Nation. |
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chisel
hate to tell you this as your a mortgage adviser (scary) but rates already have gone up pal compare 5 yr fixed now from 12 months ago. They are significantly higher. Even though deflation is a possibility, inflation is also a major threat. dependent on the guys circumstances, he should be looking at affordability of scenarios and what he can afford. if he can't afford the risk of rising rates then he should be sensible and**on something that is affordable and can give him piece of mind rather than taking a punt on the state of the economy. Who really know what is going to happen?? I hope you don't make these "ridiculous" comments about the world economy when your selling mortgages. I fear for your clients who could all be floating out to sea without an anchor :( |
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d13phe:
I'm afraid that kind of reasoning is how the mortgage providers make their money. A**is really just an insurance policy and unless you have more information than the market, you are almost certainly paying over the odds for your "peace of mind". Invariably, the most EV+ route is to not take a**(although admittedly not the most risk free) |
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one those two are talking sh*t but which one ? votes please
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hope it d13phe
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time will tell what odds no change next month
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And don't forget, interest rates have to AVERAGE more than your**over the term to be more expensive. A rise of 4% over the next two years (unless it happened almost immediately and in one go) would almost certainly cost you less than a**
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Hey Bayes, how's it going?
Haven't seen you post for ages! |
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Ban rescinded!
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Great. Welcome back :)
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Anyone worried about deflation should sell up their properties, stick their money in commodities (gold, silver, oil) and/or strong currencies (like Aussie Dollar, Rand, Swiss Franc or Norwegian Kroner).
Then when prices hit bottom go back into the market. |
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D13
It is about risk! Sitting on a Tracker 3% above the base rate is more risky than sitting on a mortgage .75% above base rate. The point is that the risk is much lower for the poster, so he may as well sit tight. No one ion their right mind would choose a 5 year Fixed which is over 5%. I was offereed a five year Fixed in November 2008 by Coventry at 3.99%. I turned it down because I have a Tracker 0.75% above the base rate. If someone offered me that deal now I would probably take it!! The point is that timing is everything, and even if base rate goes up, it does not mean that Fixed rates will increase... Reasoning?? Well, if rates increase it means teh economy is improving and banks are going to be in better shape/more competition. When this situation arrises lending margins will be cut and Fixe drates could fall. I avise anyon e witha Tracker which is less than 2% higher than base rate to stay put for the time being. If you are paying between 2% and 3% above base rate I would consider Fixing, and for anyone paying a higher variable rate**now. 4 year Fixed at 4.84% is not bad value! |
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cant change now so will have to ride my luck
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but if anyone sees a super deal let me no
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NIce 4 year Fixed rate out today at 4.49% with free legals and valuation. £999 arrangement fee added to the loan. This is the best medium/long term Fixed I have seen for a long time , and is 0.4% lower than before.
Personally I still THINK YOU are on a better deal, but of you really want security ..... |