Mortgage Renewal Due Soon

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# 1
OssyClaret
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Mortgage Renewal Due Soon

Postby OssyClaret » Wed Aug 07, 2019 11:16 am

Up the Clarets experts....

My mortgage is due for renewal in the next couple of months so looking for a new deal before moving on to standard APR at an unfavourable rate.

From what I've read the only certainty about the impact Brexit will have on the economy is uncertainty so not sure anyone will have the 'right' answer. Planning a visit to a mortgage advisor soon but interested in hearing from the experts (no qualifications needed :roll: ) on here.

What would you do? Fixed tracker, short fixed deal, longer fixed?

Any products you've seen that you think look favourable?

Coming off a 2yr fixed at 1.34%

Cheers

# 2
Quickenthetempo
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Re: Mortgage Renewal Due Soon

Postby Quickenthetempo » Wed Aug 07, 2019 11:21 am

The first thing to find out is what you will be paying once the fixed term finishes?

Whilst I was looking for a renewal 10 years ago the interest rate dropped and dropped so I just kept my first mortgage on unfixed. Saved thousands.

# 3
OssyClaret
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Re: Mortgage Renewal Due Soon

Postby OssyClaret » Wed Aug 07, 2019 11:30 am

Quickenthetempo wrote:The first thing to find out is what you will be paying once the fixed term finishes?

Whilst I was looking for a renewal 10 years ago the interest rate dropped and dropped so I just kept my first mortgage on unfixed. Saved thousands.


It's 4.24% so definitely an unfavourable option

# 4
clarethomer
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Re: Mortgage Renewal Due Soon

Postby clarethomer » Wed Aug 07, 2019 11:39 am

Have you asked your lender what retention products they have?

That’s usually the 1st point of call

# 5
IanMcL
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Re: Mortgage Renewal Due Soon

Postby IanMcL » Wed Aug 07, 2019 11:40 am

My thought is that interest rates may rise to counter inevitable inflation. Swift fixed mortgage for the longer term, would be my action.

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OssyClaret
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Re: Mortgage Renewal Due Soon

Postby OssyClaret » Wed Aug 07, 2019 11:48 am

clarethomer wrote:Have you asked your lender what retention products they have?

That’s usually the 1st point of call


Just had an email saying they will be in touch. I know they will have different products and have checked them out online. They are fairly competitive.

The options I can see are:

Fixed tracker - which should be better if interest rates drop from their already historically low current rate.
Short fixed - Gives some certainty for the next couple of years but may mean I pay more if interest rates do drop.
Long Fixed - Plenty of certainty if going for a 5 or 10 yr deal but at a premium of a higher lending rate. Might be a winner if inflation drives interest rates but could be a loser if interest rates drop or remain stable

Not a clue which way to go.

# 7
pompeyclaret
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Re: Mortgage Renewal Due Soon

Postby pompeyclaret » Wed Aug 07, 2019 11:50 am

Be aware of fees too - some will charge thousands of pounds for a two year tracker/ fixed rate at a low fee. Might be worthwhile if you owe £300k, but not if you only owe £50k. They will do slighter higher rates but no fees, which could work out cheaper for you.

Would advise contact current provider for rates as a first point of call as suggested. Less issues with forms and acceptance to renew with same provider, assuming they're competitive price wise.

# 8
brigante
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Re: Mortgage Renewal Due Soon

Postby brigante » Wed Aug 07, 2019 11:54 am

IanMcL wrote:My thought is that interest rates may rise to counter inevitable inflation. Swift fixed mortgage for the longer term, would be my action.


Same

# 9
TheOriginalLongsider
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Re: Mortgage Renewal Due Soon

Postby TheOriginalLongsider » Wed Aug 07, 2019 11:56 am

A broker is a good choice but make sure they cover the whole of the market rather than those that give the highest commission

I work for a building society and we are expecting a rate drop soon of up to 0.5% so I wouldn’t go for fixed at the moment unless certainty is what you need.

# 10
clarethomer
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Re: Mortgage Renewal Due Soon

Postby clarethomer » Wed Aug 07, 2019 11:57 am

You need to consider fees and exit penalties.

I personally just like to know what I’m paying.

Nobody has a crystal ball but the level of debt and how much wiggle room you have in your disposable income to afford increases etc. are considerations.

I would look at overall cost of the deal rather than pure rate and then work out how much rates would need to rise before you are better off being on fixed if you are choosing a tracker or variable rate product.

You could then also look at going for the lowest rate and reducing your term to meet the payment of the fixed rate if that is affordable... but ensure you can afford rate rises still.

If you want peace of mind, pay for it through a fixed rate.

# 11
Quickenthetempo
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Re: Mortgage Renewal Due Soon

Postby Quickenthetempo » Wed Aug 07, 2019 12:07 pm

OssyClaret wrote:It's 4.24% so definitely an unfavourable option

The bank of England has their rate at 0.75%.

So you're leaving a fixed rate mortgage and it will still be fixed at 3.49% above the BoE?

Seems very high but I haven't looked for years.

# 12
ElectroClaret
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Re: Mortgage Renewal Due Soon

Postby ElectroClaret » Wed Aug 07, 2019 12:17 pm

U.S. interest rates will soon be on the rise, according to most financial analysts.
Ours will follow, sure as night follows day.
Just make sure you can pay back what you borrow, plus any rise in your interest rate.
This is why I'd be seriously considering a fixed rate. Of course, depends what deal they'll give you.
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# 13
tim_noone
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Re: Mortgage Renewal Due Soon

Postby tim_noone » Wed Aug 07, 2019 12:30 pm

Once upon a Time I popped into the estate agents after seeing a picture of the house in the window and bought the house on a repayment mortgage...sold the house not at much profit for a bigger house nearby.. After a year or two I remortgaged and bought a second House...it all seemed pretty simple.'the big Deal' at the time was Endowments and talking to financial Advisors. I didn't Bother.

# 14
damo_whitehead
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Re: Mortgage Renewal Due Soon

Postby damo_whitehead » Wed Aug 07, 2019 12:38 pm

I recently remortgaged and got a better fixed rate for 5 years, but instead of saving a bit of money a month I took 9 months off the mortgage, much better in the long run for the same cost a month
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# 15
Walton
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Re: Mortgage Renewal Due Soon

Postby Walton » Wed Aug 07, 2019 12:51 pm

Nazim at Mortgage 65 on Lomeshaye is your man.

0845 656 0010

# 16
Loyalclaret
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Re: Mortgage Renewal Due Soon

Postby Loyalclaret » Wed Aug 07, 2019 12:57 pm

We’ve just fixed for 5 years, continued with the same provider (Barclays), the financial advisor identified one which was looked cheaper but when the fees were included it was not. Also easier to stay with current provider with regards to the application, especially when there was no financial benefit.

Good advice from clarethomer (memory says poster is involved in finance?) regarding comparing the overall cost of the borrowing like you should with any credit.

# 17
No Ney Never
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Re: Mortgage Renewal Due Soon

Postby No Ney Never » Wed Aug 07, 2019 12:59 pm

ElectroClaret wrote:U.S. interest rates will soon be on the rise, according to most financial analysts.
Ours will follow, sure as night follows day.
Just make sure you can pay back what you borrow, plus any rise in your interest rate.
This is why I'd be seriously considering a fixed rate. Of course, depends what deal they'll give you.

If the trade war between China and the US, as well as Japan and South Korea continue, in addition to instability in the middle east affecting oil prices, then prices are likely to rise. That will fuel inflation causing a rise in interest rates to try and combat it. Then add in potential price rises from a no deal Brexit, and you can see why a number of analysis indicate a likely rise in interest rates.
Of course if all these issues are resolved and/or there is a complete collapse in consumer spending, interest rates may be lowered to encourage spending. So many variables.
Thankfully a few years ago, I fixed for 10 years at 2.29%. Happy with the stability and peace of mind it gives.

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kaptin1
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Re: Mortgage Renewal Due Soon

Postby kaptin1 » Wed Aug 07, 2019 1:10 pm

No Ney Never wrote:If the trade war between China and the US, as well as Japan and South Korea continue, in addition to instability in the middle east affecting oil prices, then prices are likely to rise. That will fuel inflation causing a rise in interest rates to try and combat it. Then add in potential price rises from a no deal Brexit, and you can see why a number of analysis indicate a likely rise in interest rates.
Of course if all these issues are resolved and/or there is a complete collapse in consumer spending, interest rates may be lowered to encourage spending. So many variables.
Thankfully a few years ago, I fixed for 10 years at 2.29%. Happy with the stability and peace of mind it gives.


The bond market is currently pricing in lower interest rates going forward, with expectations having reduced in recent weeks as trade wars have intensified and the risk of a no deal Brexit has increased. Of course it might be wrong but the market is normally much better at assessing these macroeconomic drivers than any individual is. It’s the wisdom of the crowd.

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barba
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Re: Mortgage Renewal Due Soon

Postby barba » Wed Aug 07, 2019 1:12 pm

TheOriginalLongsider wrote:I work for a building society and we are expecting a rate drop soon of up to 0.5% so I wouldn’t go for fixed at the moment unless certainty is what you need.


I would agree with this, bond yields which are used to price mortgages are falling with the 10 year Gilt yield falling to its lowest level ever this week. This is predominantly on the back of a “flight to safety” for institutions as they try to avoid the stock market impact on the US / China trade wars and a general global slowdown.

We have also seen the US cut rates last week and calls for further cuts before the end of the year and Thailand, India and New Zealand have all cut rates today. I would expect the UK’s next move to cut.

# 20
kaptin1
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Re: Mortgage Renewal Due Soon

Postby kaptin1 » Wed Aug 07, 2019 1:13 pm

I would also add the swap rates have also fallen sharply and they are the benchmark off which fixed rate mortgages are priced. However, mortgage prices have yet to catch up.

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OssyClaret
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Re: Mortgage Renewal Due Soon

Postby OssyClaret » Wed Aug 07, 2019 1:29 pm

Quickenthetempo wrote:The bank of England has their rate at 0.75%.

So you're leaving a fixed rate mortgage and it will still be fixed at 3.49% above the BoE?

Seems very high but I haven't looked for years.


Yes if just don't do anything I would move on to the lender's Standard Mortgage Rate which is 4.24%, crazy eh!

# 22
barba
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Re: Mortgage Renewal Due Soon

Postby barba » Wed Aug 07, 2019 1:37 pm

Are you with Nationwide? 4.24% sounds like their latest SVR

# 23
OssyClaret
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Re: Mortgage Renewal Due Soon

Postby OssyClaret » Wed Aug 07, 2019 2:08 pm

barba wrote:Are you with Nationwide? 4.24% sounds like their latest SVR


Yes

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OssyClaret
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Re: Mortgage Renewal Due Soon

Postby OssyClaret » Wed Aug 07, 2019 2:49 pm

Good advice clarethomer. The products with fees actually work out more expensive over the term so will be going with a fee free product.

Also like the certainty of knowing what I'm paying despite the advice that interest rates may drop. Any deal I move to will be worse than the one I got 2 years ago.

The best fee free tracker with my lender is base rate plus 1.24%.

If I stay with current lender I think I've narrowed it down to either
2 year fixed at 1.94% or 5 year fixed at 2.14%.

Works out around £18 a month for 5 years (£1080) more for an extra 3 years of certainty. Not sure which way to go?

# 25
No Ney Never
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Re: Mortgage Renewal Due Soon

Postby No Ney Never » Wed Aug 07, 2019 3:15 pm

kaptin1 wrote:I would also add the swap rates have also fallen sharply and they are the benchmark off which fixed rate mortgages are priced. However, mortgage prices have yet to catch up.

Since you're following the market and to save me having to do the research, is this a bit of a blip or is there a downward trend forming?

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barba
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barba

Postby barba » Wed Aug 07, 2019 4:14 pm

OssyClaret wrote:Also like the certainty of knowing what I'm paying despite the advice that interest rates may drop.


Falls in gilt yields usually lead to a cut in fixed mortgage rates which has not happened yet.

One poster works for a BS and said they were expecting cuts to rates very soon.

Therefore if you are happy to stay with your lender and have time until your deal expires then it maybe worth waiting to see what happens leaving enough time to switch regardless.

I get regular correspondence from NWide so can update thread if any rate changes are expected.

# 27
clarethomer
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Re: Mortgage Renewal Due Soon

Postby clarethomer » Wed Aug 07, 2019 4:20 pm

OssyClaret wrote:Good advice clarethomer. The products with fees actually work out more expensive over the term so will be going with a fee free product.

Also like the certainty of knowing what I'm paying despite the advice that interest rates may drop. Any deal I move to will be worse than the one I got 2 years ago.

The best fee free tracker with my lender is base rate plus 1.24%.

If I stay with current lender I think I've narrowed it down to either
2 year fixed at 1.94% or 5 year fixed at 2.14%.

Works out around £18 a month for 5 years (£1080) more for an extra 3 years of certainty. Not sure which way to go?


Do you intend to stay where you are for 5 years? 2.14% is still a good rate - when you look in context of historical rates. The tracker doesn’t seem worth considering as it’s very close to the fixed rates and not enough ‘fat’ in the difference should a rate rise happen.

# 28
barba
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Re: Mortgage Renewal Due Soon

Postby barba » Wed Aug 07, 2019 4:44 pm

No Ney Never wrote:Since you're following the market and to save me having to do the research, is this a bit of a blip or is there a downward trend forming?


The situation is very serious in the Bond market. There is now > $14tn which is yielding at zero or negative rates. An increase on 150% since October 2018.

As an example Jyske Bank in Denmark have just issued a 10 year mortgage where they pay you 0.5% to borrow money.

This is pure madness and weakens the financial system tremendously and allows zombie companies to continue operating.

More importantly is that the bond market provides good indications of incoming recessions and the chances of one are increasing.

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OssyClaret
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Re: barba

Postby OssyClaret » Thu Aug 08, 2019 11:11 am

barba wrote:Falls in gilt yields usually lead to a cut in fixed mortgage rates which has not happened yet.

One poster works for a BS and said they were expecting cuts to rates very soon.

Therefore if you are happy to stay with your lender and have time until your deal expires then it maybe worth waiting to see what happens leaving enough time to switch regardless.

I get regular correspondence from NWide so can update thread if any rate changes are expected.


I've got another month before I need to commit to switching so I may take a bit more time yet.

Any updates you get from Nationwide would be great!

Thanks again

# 30
Fretters
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Re: Mortgage Renewal Due Soon

Postby Fretters » Thu Aug 08, 2019 12:40 pm

Sorry to hijack this thread a bit but I'm half way through a fixed mortgage that is 75% loan-to-value so there's equity there. We'd like some work done on the house - am I right in thinking that I can only release equity without incurring penalties at the end of my fixed term when I remortgage? Or is there another way?

# 31
barba
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Re: Mortgage Renewal Due Soon

Postby barba » Thu Aug 08, 2019 12:48 pm

Fretters wrote:Sorry to hijack this thread a bit but I'm half way through a fixed mortgage that is 75% loan-to-value so there's equity there. We'd like some work done on the house - am I right in thinking that I can only release equity without incurring penalties at the end of my fixed term when I remortgage? Or is there another way?


Go to your existing lender for a "further advance". If you look at their website they will give the criteria but usually it is 80%-85% max total LTV and the additional loan would be on a new deal so you would need to tie it to end with the main mortgage.

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Fretters
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Re: Mortgage Renewal Due Soon

Postby Fretters » Thu Aug 08, 2019 12:51 pm

barba wrote:Go to your existing lender for a "further advance". If you look at their website they will give the criteria but usually it is 80%-85% max total LTV and the additional loan would be on a new deal so you would need to tie it to end with the main mortgage.


That's exactly what I'm after - thank you!


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