Rich Posted April 29 Author Report Share Posted April 29 I have got the 4.46% fixed rate locked in for 14 days and will see what happens at the next BoE meeting. My mortgage broker says I need to do what's right for me and I would prefer to know what is going out each month. I think his opinion is stick with the tracker for now even if it is more. It's probably going to drop 0.25% in the next couple of months or so and maybe further by the end of the year. He's confident by 2026 it could be as low as 3% but it's all speculation. With the 5 year fix Santander will charge an ERC of 5% in the first 2 years, 3% the next 2 and 1% in the last. If we move in 2-4 years time and need to repay a chunk of the mortgage back that's going to wipe out any saving I would've made fixing the rate and overpaying. If I extend the term and switch back to a repayment mortgage that makes the payments more comfortable on the tracker. Our tracker is 0.34% and we have that until September 2025. By then we could be seeing alot of rates under 4% so maybe the tracker is better. I would just have to hope the base rate doesn't actually increase rather than drop! Unlikely but you just never know. Quote Link to comment Share on other sites More sharing options...
Rich Posted April 29 Author Report Share Posted April 29 Santander have announced rates are increasing tomorrow, so it looks like I was wise to lock the current one in. Quote Link to comment Share on other sites More sharing options...
adam_r Posted May 1 Report Share Posted May 1 It's always a gamble... But fixing for 5 years gives you the certainty of outgoings, at least for your mortgage. FYI your mortgage adviser is talking out his backside, they are no wiser than you or I for what rates will be in a few years. Quote Link to comment Share on other sites More sharing options...
Rich Posted May 2 Author Report Share Posted May 2 12 hours ago, adam_r said: It's always a gamble... But fixing for 5 years gives you the certainty of outgoings, at least for your mortgage. FYI your mortgage adviser is talking out his backside, they are no wiser than you or I for what rates will be in a few years. Everyone is just guessing what's going to happen but there is no certainty. I just wish I had locked in a new rate 18 months a go but the reason I didn't is we were planning on moving shortly. It's backfired and now I'll be paying more and with how the housing market currently is we'll be staying put for a while. I'm going to see what happens with the next BoE meeting and how many vote to lower the base rate, if any do. Then I'll accept the 4.46% fix I've locked in. That will reduce the interest by nearly £100 a month which I'll then use to overpay on the capital. Plus add extra to that so I'm at least clearing some of it before we do move in a few years - hopefully. I'm just thankful my mortgage is small compared to some who have overstretched themselves. Quote Link to comment Share on other sites More sharing options...
parthiban Posted May 2 Report Share Posted May 2 There's been a lot of murmuring from both BoE and the Fed about rate cuts so they're definitely preparing for it, it'll all be timed around the elections though - I know they're not supposed to be linked but I'm sure they are lol. When banks start raising their rates it's often because they're expecting rate cuts. It's all very uncertain though so right thing to do to just lock in at a rate that is affordable for you - sorry your plans to move didn't work out! Quote Link to comment Share on other sites More sharing options...
adam_r Posted May 3 Report Share Posted May 3 On 02/05/2024 at 16:30, parthiban said: There's been a lot of murmuring from both BoE and the Fed about rate cuts so they're definitely preparing for it, it'll all be timed around the elections though - I know they're not supposed to be linked but I'm sure they are lol. When banks start raising their rates it's often because they're expecting rate cuts. It's all very uncertain though so right thing to do to just lock in at a rate that is affordable for you - sorry your plans to move didn't work out! Will be interesting to see how labour do in the coming years... Current election results put them way ahead of anyone else. Not sure if we should be worried or not🤣 Quote Link to comment Share on other sites More sharing options...
eddie Posted May 3 Report Share Posted May 3 no point in worrying - alcohol is here for. a reason! 1 1 Quote Link to comment Share on other sites More sharing options...
adam_r Posted May 3 Report Share Posted May 3 10 minutes ago, eddie said: no point in worrying - alcohol is here for. a reason! You are not wrong. I wonder how much damage they will do. Can't be worse than the last lot of conservatives though. I voted a local independent as I did not want my vote going to the major parties. After watching PM questions, I believe that the house is just turning in to a bunch of children. I could not believe what was being said and the pathetic jeers for either side 1 Quote Link to comment Share on other sites More sharing options...
Rich Posted May 5 Author Report Share Posted May 5 On 02/05/2024 at 16:30, parthiban said: There's been a lot of murmuring from both BoE and the Fed about rate cuts so they're definitely preparing for it, it'll all be timed around the elections though - I know they're not supposed to be linked but I'm sure they are lol. When banks start raising their rates it's often because they're expecting rate cuts. It's all very uncertain though so right thing to do to just lock in at a rate that is affordable for you - sorry your plans to move didn't work out! How does that explain the start of the year when fixed rates were dropping to under 4% as they were expecting the BoE to cut the base rate. Even if it starts dropping it's going to be a slow process. I think I'm taking the 4.46% but will see what happens at the next meeting first. If it dropped another percent to 3.5% that's another £80 a month I could've saved. Looking at the overall picture that's not much difference really. Is it worth risking them staying or even increasing in the hope I might save that extra amount. We're still moving, just putting it off by choice. There isn't much on the market that we like and with my promotion and decent payrise last month it makes sense to stay put while things hopefully settle. Quote Link to comment Share on other sites More sharing options...
parthiban Posted May 6 Report Share Posted May 6 The rates never dropped at the start of the year though? If this level is affordable for you make sense to fix, the rest of this year is going to be very unpredictable given the elections here and in the US. Quote Link to comment Share on other sites More sharing options...
Rich Posted May 7 Author Report Share Posted May 7 The fixed rates dropped as they were expecting the BoE to drop the base rate but it didn't happen. I could've got a 5 year fix for 3.89%, which will now be 4.46% (as I've locked it in) but was increased again last week to 4.58%. Everything I'm reading suggests they won't cut it any time soon and if they do it'll only be 0.25% at a time. So a 1% drop will take a while. I'm waiting until Thursday then I'll take the 5 years I've locked in. It's a better rate than what some people are offered with higher LTVs. I'm comfortable with that rate but any higher and the saving isn't worth fixing in as it'll only be around 0.5% lower than my tracker. By the time the base rate has dropped I would've spent hundreds more staying on the tracker, so can't really win either way. Quote Link to comment Share on other sites More sharing options...
parthiban Posted May 7 Report Share Posted May 7 What happened then was a little different, it was actually due to the increased rates leading to increased cash deposits. As the banks were sitting on a lot of cash and no one was buying any property because of the uncertain environment the banks started aggressively competing with each other to try to win whatever business was out there. Seems sensible, whatever happens it will take a while, so no point waiting indefinitely if your deal is up. Quote Link to comment Share on other sites More sharing options...
Rich Posted May 7 Author Report Share Posted May 7 I didn't know that but makes sense 🙂 Tracker rate (0.34%) ends September 2025 but if it takes say a year for the base rate to fall by 1% that brings it down to 4.59%. So still slightly higher than the new 5 year fix I'm looking at. By then my deal will be finishing and fixed rate deals might not have changed much or even increased. Most likely they will have dropped but I can't see it being that much less than current rates. The days of 1-3% rates are long gone. If they drop that low again all it will do it increase property prices further. 1 Quote Link to comment Share on other sites More sharing options...
Rich Posted Thursday at 14:09 Author Report Share Posted Thursday at 14:09 Base rate held at 5.25% with 7 voting to keep it there and 2 dropping it. It's going to be like fuel prices, quick to increase it but slow to drop. Think I'm taking the 5 year fix. 1 Quote Link to comment Share on other sites More sharing options...
parthiban Posted Thursday at 16:07 Report Share Posted Thursday at 16:07 Yep I'd go for it, I can't see anything happen until we get closer to the election. It all surrounds the US and UK elections and both countries will start dropping rates together. It makes sense too, they'll drop the rate to try and win the election, and even if it doesn't work the new govt needs to be the ones to put the rates back up again which is unpopular so it's a win win scenario. 2 Quote Link to comment Share on other sites More sharing options...
eddie Posted Friday at 09:08 Report Share Posted Friday at 09:08 I fixed my mortgage in August 2007 for 5 years at 5.33%. By the time the five year term finished I think interest rates had fallen to about 2% or even less. Such is life! 😄 This time around I let my last fix lapse and I have stayed on SVR which has gone from 2.8% to 6.7%. Like you Rich, we were thinking we might move at some point but finding a new gaff is easier said than done. I don't like seeing the monthly payments go up the way they have but the fees for fixing are high as well as exit fees if you can't port the mortgage to the new property. Always a bit of a dilemma... Quote Link to comment Share on other sites More sharing options...
Rich Posted Friday at 11:09 Author Report Share Posted Friday at 11:09 31 minutes ago, eddie said: I fixed my mortgage in August 2007 for 5 years at 5.33%. By the time the five year term finished I think interest rates had fallen to about 2% or even less. Such is life! 😄 This time around I let my last fix lapse and I have stayed on SVR which has gone from 2.8% to 6.7%. Like you Rich, we were thinking we might move at some point but finding a new gaff is easier said than done. I don't like seeing the monthly payments go up the way they have but the fees for fixing are high as well as exit fees if you can't port the mortgage to the new property. Always a bit of a dilemma... We bought in 2017 and I think the 5 year fix was 2.4%. Even when rates were dropping to under 1% I didn't bother switching to a new product as the ERC and fees wipe out any saving. When that finished and we thought we'd be moving soon the tracker seemed the best product to switch to. The base rate was 2.25% then and in hindsight I should've fixed for a year or two then. Even with moving things take time and I'm sure it could've been ported or ERC would've been low. Fixing at 4.46% has no fees (the 3.89% one did) so overall it's not that much more. If you move are you looking to stay in the area and do you work from home? As we're planning on moving to another county there is alot more to arrange. Plus like you say finding a house you like is no easy task! Quote Link to comment Share on other sites More sharing options...
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