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      08-05-2010, 07:08 AM   #1
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Mortgage Advice

Ive been looking at mortgages and wondered what are the bext offers around? Variable or Fixed. Ive seen some quotes and there seems to be some difference but confused where it would benefit me. Any advice? Bit new in this area so please go easy
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      08-05-2010, 07:21 AM   #2
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      08-05-2010, 08:33 AM   #3
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So, Roger, what does your financial crystal ball predict for interest rates in the short/medium term?
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      08-05-2010, 08:52 AM   #4
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      08-05-2010, 09:14 AM   #5
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...in answer to your question...

It's still difficult to say as thoughts have changed from yesterday to today; literally.

There are two camps. One who thinks the interest rate will stay very low for another 12-18 months and then climb quite quickly up to 5%ish over the following 12-18 months. The other camp sees a slower increase but ultimatley ending up at 5%ish over the next 3-5 years. This might sound bleedin' obvious, and sitting on the fence, but you did ask .

External factors such at VAT changes in January, low inflation (and it's own prediction), and the effect of the Goverments guillotine taking affect are all making interest rate predictions difficult. Other factors like 'loan to value' and level of security people want to see in their payments also affect what deals are available and their suitability.

I think the most popular prediction is 0.25%, perhaps 0.5%, over the next 12 months. Ernst & Young say it'll stay at 0.5% until Easter next year .

It'll go up, but predicting when and at what rate is the difficult bit, that's why I'm speaking to my mortgage man constantly about it. More information will be out in a couple of weeks time when, yet another, finance report is released.

I'll be jumping to a fixed rate, from my current SVR, just when my nerves can take no more. You can actually apply for one 3 months in advance, get it agreed, then keep delaying the start date. If you don't need it just cancel it. I'll be doing this to try to secure the best fixed rate before it's withdrawn - a bit of a pain but fairly cunning . Not really a service I can offer to everyone as pretty time consuming.

Watch this space...
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Last edited by rogerxp; 08-05-2010 at 09:21 AM.
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      08-05-2010, 09:52 AM   #6
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Quote:
Originally Posted by rogerxp View Post
...in answer to your question...

It's still difficult to say as thoughts have changed from yesterday to today; literally.

There are two camps. One who thinks the interest rate will stay very low for another 12-18 months and then climb quite quickly up to 5%ish over the following 12-18 months. The other camp sees a slower increase but ultimatley ending up at 5%ish over the next 3-5 years. This might sound bleedin' obvious, and sitting on the fence, but you did ask .

External factors such at VAT changes in January, low inflation (and it's own prediction), and the effect of the Goverments guillotine taking affect are all making interest rate predictions difficult. Other factors like 'loan to value' and level of security people want to see in their payments also affect what deals are available and their suitability.

I think the most popular prediction is 0.25%, perhaps 0.5%, over the next 12 months. Ernst & Young say it'll stay at 0.5% until Easter next year .

It'll go up, but predicting when and at what rate is the difficult bit, that's why I'm speaking to my mortgage man constantly about it. More information will be out in a couple of weeks time when, yet another, finance report is released.

I'll be jumping to a fixed rate, from my current SVR, just when my nerves can take no more. You can actually apply for one 3 months in advance, get it agreed, then keep delaying the start date. If you don't need it just cancel it. I'll be doing this to try to secure the best fixed rate before it's withdrawn - a bit of a pain but fairly cunning . Not really a service I can offer to everyone as pretty time consuming.

Watch this space...
I am watching carefully too, my mortgage is a lifetime tracket at BoE + 1.03%, but there is a 'floor' at 2%, so am currently paying 3.03%. Therefore, I have a 1.5% cushion before my mortgage is affected. I am hoping that gives me about 18 months or so. I do have the option of a 'switch and fix' for free with the same provider, but the rates are not particluarly favourable, certainly at the moment.

A two year pay freeze doesn't help matters either if rates begin to rise, but hey ho, at least I have a job.

Lets hope investment returns start to improve markedly to compensate!

Sorry to the OP, seem to have been threadjacked!
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      08-05-2010, 10:01 AM   #7
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Quote:
Originally Posted by peterg1965 View Post
Sorry to the OP, seem to have been threadjacked!
Good point. I'm sure our conversation with either help him or, more likely, scare the living sh!te out of him
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      08-05-2010, 11:08 AM   #8
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It won't jump up to like 15% will it?
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      08-05-2010, 11:25 AM   #9
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It won't jump up to like 15% will it?
If it did then there would be more repossessions then at any other time in history!
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      08-05-2010, 11:39 AM   #10
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If it did then there would be more repossessions then at any other time in history!
Yep I know, thats what Im worried about.
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      08-05-2010, 12:08 PM   #11
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i suspect we are on for a repeat of the early 90s in the next 5 years.

its happened before and it will happen again. Govts cant do much about it.

If history is anything to go by, interest rates are about to soar and soar. house prices will fall and generally people will get fekked over. this usually happens when too many people get wealthy and the banks harvest back their wealth with repossesions, which are sold on before house prices hit rock bottom.

Once house prices are so low, the banks start lending again, asking people to pay double for the value of the price. 20 years later, they reposses the house after taking tens of thousands in monthly repayments, when house prices get high again.

Sounds like a conspiracy theory, so to back this up. this week, huge profits for the must have industries. banks, gas, eleccy, petrol when the rest of us are worried about our futures and jobs. remember, the taxpayer bailed out many banks only a few months ago. Next step in the cycle is higher interest rates, repossesions and then low house prices once they have harvested their profits.


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      08-05-2010, 12:11 PM   #12
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it wont be allowed to get that high again but then again Im sure they said that before!! Folk werent as up to their eyes in debt as they are now so a different ball game. Maybe 6% tops.
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      08-05-2010, 12:12 PM   #13
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i took out a tracker mortgage in 2006 with lloyds at .50% above base rate,150k payed a bit off now at 135k now moved and renting it as i building my new place,at the moment i am paying 110ish a month and renting for 600 soon as it goes up i will sell it and get my money back that i put in, maybe a M3 lol,
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      08-05-2010, 02:18 PM   #14
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You guys seemed to know what your talking about!...I find these mortgage stuff very complicated!!!...
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      08-05-2010, 03:06 PM   #15
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I did two reposessions today.

Don't panic Carl it's nothing like it was in the early nineties and it will not become so either!

I'm sure you enjoy worrying.
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      08-06-2010, 03:46 AM   #16
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I did two reposessions today.
is this normal?
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      08-06-2010, 04:40 AM   #17
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I'm in a similar boat with a BR+0.5% tracker.

Either way I've already had the meetings with my mortgage guy and have the option of a rate switch or re-mortgage. Just a case of keeping an eye on the base rate and holding out as long as my nerves can! Currently paying 110 a month but with an extra 1200 so have plenty of "scope" for the rates increasing.

It's definitely going to go up at some point, but I just don't see it being the overnight bankruptcies of the past. For that to happen the country would be completely FUBAR (well, it is but you know what I mean).

Even so, the last 18 months have been great for doing up the house (we have no real intention of moving) and paying off big wodges of the principle.
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      08-06-2010, 05:02 AM   #18
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Luckily we have been enjoying the benefits of an offset mortgage for the past 3 years on our current property, which has been great in the current climate as we are offsetting more than we owe on it.
On our second property we have just taken a two year fixed interest only mortgage, so by the time rates have shot back up we will then hopefully be in a position to switch to another offset keeping the payment very similar (in theory anyway).
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      08-06-2010, 05:24 AM   #19
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Lots of balancing and juggling to be done in the coming months/years.

Thankfully, for our mortgage chap, it's going to be a busy time coming up. They've really suffered over the last couple of years as they just couldn't offer much to clients. With interest rates so low, and virtually everyone's mortgages defaulting to SVR eventually, the advice was to sit tight until the rates increase (good advice but doesn't bring the bacon home). As soon as the rates start to climb, or just before ideally, he's going to be calling everyone grabbing the best fixed rates (we've been building a database over the last couple of years of everyone effected) so hopefully recoup some of the recently lost income; that's the plan at least.
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      08-06-2010, 05:33 AM   #20
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market is still somewhat unstable, so select the neighborhood more carefully than the actual home.
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