Mortgage advice

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ClaretCraig
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Mortgage advice

Post by ClaretCraig » Mon Oct 12, 2020 10:12 pm

Hi I'm currently coming to the end of my 5 year fixed rate mortgage and have been offered 7 products. I'm currently with Skipton Building Society and I would prefer to stay with them really.
The products are as follows
2 years fixed at 1.64 with a product fee of 995
2 years fixed at 1.89 with no product fee
2 years tracker with no fee
2 years fixed at 2.2 with no fee
5 years fixed at 1.94 with a product fee of 995
5 years fixed at 2.3 with no product fee
10 years fixed at 2.84 with no product fee.
Thanks in advance.

Barry_Chuckle
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Re: Mortgage advice

Post by Barry_Chuckle » Mon Oct 12, 2020 10:17 pm

2 years tracker with no fee.

Interests rates could go negative, can't see them moving much upwards anytime soon, I'd avoid fixing at present, especially if there's a fee to boot.

Just my opinion.

TVC15
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Re: Mortgage advice

Post by TVC15 » Mon Oct 12, 2020 10:20 pm

Whether you should pay a fee for the fixed products or not depends on the amount of your mortgage. You should be able to calculate the cheaper option.

What rate is the tracker at ? Is it linked to base rate and if so what is the margin above this ?

If it’s linked to base rate then all the economic forecasts point to base rate remaining low for a good while yet (at least a couple of years).

You also need to consider your own personal circumstances in making these decisions. You might prefer a fixed because you like knowing what is coming out every month and can budget accordingly.

Personally I’d be on the tracker

ClaretCraig
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Re: Mortgage advice

Post by ClaretCraig » Mon Oct 12, 2020 10:26 pm

Hi guys thanks the tracker is at 2.12( base rate plus 2.02).
My mortgage remaining is 41500 and luckily my employment is very secure even in this current situation.

dpinsussex
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Re: Mortgage advice

Post by dpinsussex » Mon Oct 12, 2020 10:28 pm

Are you planning to move in the next 10 years?

ClaretCraig
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Re: Mortgage advice

Post by ClaretCraig » Mon Oct 12, 2020 10:29 pm

dpinsussex wrote:
Mon Oct 12, 2020 10:28 pm
Are you planning to move in the next 10 years?
Hi it's a possibility but it won't be for at least 5 years.

paulatky
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Re: Mortgage advice

Post by paulatky » Mon Oct 12, 2020 10:33 pm

With such a relatively small mortgage a product with no fee will almost always be the most cost effective.

TVC15
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Re: Mortgage advice

Post by TVC15 » Mon Oct 12, 2020 10:33 pm

Not a great tracker rate that - you may aswell take one of the fixed products. With that low amount remaining you are much better off taking the one without the fee.

You might also want to see if you can pay more than you need to each month so that it gets repaid quicker / goes into an overpayment fund if they offer that as an option. If they do have an overpayment fund option it means you can use this against your mortgage or if your circumstances change you can draw out what you have overpaid for other reasons.

Quickenthetempo
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Re: Mortgage advice

Post by Quickenthetempo » Mon Oct 12, 2020 10:34 pm

Use the mortgage tool on the banks website but if you go 10 years only paying 2.84 interest rate you have done well I say.
Obviously try and avoid product fees. Better to pay the grand off your mortgage early and avoid interest if you can.

dpinsussex
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Re: Mortgage advice

Post by dpinsussex » Mon Oct 12, 2020 10:35 pm

ClaretCraig wrote:
Mon Oct 12, 2020 10:29 pm
Hi it's a possibility but it won't be for at least 5 years.
Base rate is unlikely to rise over the next few years. When it does and by how much nobody knows. The fixed rate gives you an insurance that you won't pay any more.
If you move after 5 Yr then another arrangement fee.

So for me5 Yr fix or 2 Yr tracker depends on your appetite to risk.

paulatky
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Re: Mortgage advice

Post by paulatky » Mon Oct 12, 2020 10:35 pm

Barry_Chuckle wrote:
Mon Oct 12, 2020 10:17 pm
2 years tracker with no fee.

Interests rates could go negative, can't see them moving much upwards anytime soon, I'd avoid fixing at present, especially if there's a fee to boot.

Just my opinion.
When the fixed rate comes to an end soon the underlying rate will probably rise to maybe 4%.

Mortgage rates have been edging up in the last 6 weeks.

Oshkoshclaret
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Re: Mortgage advice

Post by Oshkoshclaret » Mon Oct 12, 2020 11:13 pm

Wouldn’t touch the ones with fees.

Personally I’d take the 10 year fixed.
This user liked this post: levraiclaret

aggi
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Re: Mortgage advice

Post by aggi » Tue Oct 13, 2020 12:04 am

Personally I'd go 5 year fixed (whichever works out cheaper). With Covid followed by Brexit there is always the possibility of rates being forced up (although I think it's unlikely).

If you have a secure job though I'd also look at other lenders (assuming that your LTV is reasonable).

taio
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Re: Mortgage advice

Post by taio » Tue Oct 13, 2020 6:52 am

In those circumstances I'd be taking the 5 year fixed with no product fee and being mortgage free within 3 - 5 years if you can afford the monthly payments of at least £730 pcm (more if you want to and can overpay to reduce the term further).

Guppyspotter
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Re: Mortgage advice

Post by Guppyspotter » Tue Oct 13, 2020 8:29 am

As advised, with such a tiny mortgage a fee is unlikely to be cost effective as the interest saved by the lower rate is likely to be less than the fee.
With such a small mortgage consider if overpayments are allowed without penalty as it gives you the option to overpay.
With such a small mortgage consider if there a fees for early redemption if thinking of paying it off sooner.
Consider if you might take out a shorter term mortgage if you can afford more each month than the mortgage.

You can get mortgages at 1.69 fixed for 5 years for a £10 set up fee if you shop around for 2 mins.
Look beyond your current provider.

Newty
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Re: Mortgage advice

Post by Newty » Tue Oct 13, 2020 8:49 am

ClaretCraig wrote:
Mon Oct 12, 2020 10:12 pm
....I'm currently with Skipton Building Society and I would prefer to stay with them really.
Why would you prefer to stay? There's no reward for loyalty with mortgage lenders, the options they are currently offering you will be worse than they're offering new customers and significantly worse than they're offering to brokers.

I've always used a broker, and they've subsequently found a cheaper lender each time my deal is up. The few hundred quid they charge has always paid for itself because the deal has always been that much better than whatever the lender was presenting to me as their best rates.

You don't pay anything unless you take out a mortgage through the broker so its always worth asking them. Ask how much money they are going to save you compared to the deals with SBS listed above, minus their fee. No obligation if you don't like what they say.

If you are really against paying a broker a fee I'm certain you will find a better deal than any of SBS' offerings if you use a mortgage comparison website.

Lowbankclaret
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Re: Mortgage advice

Post by Lowbankclaret » Tue Oct 13, 2020 6:59 pm

dpinsussex wrote:
Mon Oct 12, 2020 10:28 pm
Are you planning to move in the next 10 years?
In some companies you can still have the money you borrowed fixed into your new property and the extra amount at a new product rate.

To be fair even the Santander mortgage advisor didn’t know you you could could that. Mine is split into three with three different rates, well until my pension comes through and I can pay it off.

Lowbankclaret
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Re: Mortgage advice

Post by Lowbankclaret » Tue Oct 13, 2020 7:02 pm

ClaretCraig wrote:
Mon Oct 12, 2020 10:12 pm
Hi I'm currently coming to the end of my 5 year fixed rate mortgage and have been offered 7 products. I'm currently with Skipton Building Society and I would prefer to stay with them really.
The products are as follows
2 years fixed at 1.64 with a product fee of 995
2 years fixed at 1.89 with no product fee
2 years tracker with no fee
2 years fixed at 2.2 with no fee
5 years fixed at 1.94 with a product fee of 995
5 years fixed at 2.3 with no product fee
10 years fixed at 2.84 with no product fee.
Thanks in advance.

I would take the ten year product with no fee. Ask if it’s portable. Ie you can move and keep that amount of money in that product. Any new loan would be at a new product.

It’s so low at the moment that’s why I would fix long term.

Fretters
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Re: Mortgage advice

Post by Fretters » Tue Oct 13, 2020 7:05 pm

Do a comparison on Moneysupermarket. If you choose one from there, they'll refer you to a Bolton firm called Fluent who will handle everything for you at no cost to you (Moneysupermarket pays them). They are absolutely brilliant and they'll probably get you an even better deal than the one you went for online.

I've just remortgaged and went for a five year fixed. I've no plans to move and I doubt interest rates will go any lower. Plus, I can't be bothered with the hassle every couple of years.

Loyalclaret
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Re: Mortgage advice

Post by Loyalclaret » Tue Oct 13, 2020 8:01 pm

We were in a similar situation, 5 year fix that will almost complete the mortgage with a couple of years over payment within the % rules.

My wife got the rate cheaper than the financial advisor by going through the bank.

With a separate BTL many providers had the same deal but more expensive for fees, easy to compare the deals.

dpinsussex
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Re: Mortgage advice

Post by dpinsussex » Tue Oct 13, 2020 8:25 pm

Lowbankclaret wrote:
Tue Oct 13, 2020 6:59 pm
In some companies you can still have the money you borrowed fixed into your new property and the extra amount at a new product rate.

To be fair even the Santander mortgage advisor didn’t know you you could could that. Mine is split into three with three different rates, well until my pension comes through and I can pay it off.
Its called porting your mortgage. 👍

prettygreenclaret
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Re: Mortgage advice

Post by prettygreenclaret » Tue Oct 13, 2020 8:51 pm

Just looking into this at present as we need to re mortgage in Jan. Looking for a fixed rate with no fees. Seen a couple of interest. One fixed for 2 years at 1.75% no fees with 400 cash back or other fixed for 5 years at 1.85%, again with 400 cash back. I guess it comes down to how you feel how interest rates will go in the next few years and whether you want to lock in for 5 years. Both look good deals and only about 3 quid a month different in monthly payments.

ewanrob
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Re: Mortgage advice

Post by ewanrob » Tue Oct 13, 2020 8:52 pm

I can remember after we left the ERM in 1992, my mortgage rate was 15.5%...on a brighter note, my last ever mortgage payment just came out of my bank account.

aggi
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Re: Mortgage advice

Post by aggi » Tue Oct 13, 2020 9:01 pm

prettygreenclaret wrote:
Tue Oct 13, 2020 8:51 pm
Just looking into this at present as we need to re mortgage in Jan. Looking for a fixed rate with no fees. Seen a couple of interest. One fixed for 2 years at 1.75% no fees with 400 cash back or other fixed for 5 years at 1.85%, again with 400 cash back. I guess it comes down to how you feel how interest rates will go in the next few years and whether you want to lock in for 5 years. Both look good deals and only about 3 quid a month different in monthly payments.
There's no point in getting hung up over fees or no fees. The total cost of fees plus interest is the important part.

EDIT: To be clear, when I say total I mean total during the fixed period. Obviously you'd want to remortgage at the end of that.
Last edited by aggi on Wed Oct 14, 2020 5:33 pm, edited 1 time in total.

prettygreenclaret
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Re: Mortgage advice

Post by prettygreenclaret » Tue Oct 13, 2020 9:18 pm

Yes that's true but I've always found going with no fee on a fixed rate at a slightly higher % rate has worked out cheaper than going for the cheaper % rate plus fee but horses for courses I guess.

Guppyspotter
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Re: Mortgage advice

Post by Guppyspotter » Wed Oct 14, 2020 4:00 pm

Total cost of mortgage is not a good way of working out what to do on a fixed term unless you intend to return to the Standard Variable Rate after it ends. Total cost of mortgage is worked out on payments and interest during the fixed period and then assumes the remaining life of the mortgage will be SVR.

If you intend to refix at the end of time period don't even both with looking at total cost.

IanMcL
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Re: Mortgage advice

Post by IanMcL » Thu Oct 15, 2020 7:13 pm

Barry_Chuckle wrote:
Mon Oct 12, 2020 10:17 pm
2 years tracker with no fee.

Interests rates could go negative, can't see them moving much upwards anytime soon, I'd avoid fixing at present, especially if there's a fee to boot.

Just my opinion.
2 years tracker with no fee.

That seems sensible, given the BofE suggesting they are considering negative interest. It means rates won't go up for the foreseeable.

Keep an eye on the market and if there are signs of an upturn, get a fix sorted, then.

levraiclaret
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Re: Mortgage advice

Post by levraiclaret » Thu Oct 15, 2020 8:20 pm

In these uncertain times go for certainty - 10 year fixed will cost you circa £4 a week extra.

levraiclaret
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Re: Mortgage advice

Post by levraiclaret » Thu Oct 15, 2020 8:22 pm

duplicate

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