Mortgages

Anyone on here work in this horrid area of finance? I'm sure this will put me in the firing line for a good ripping but here goes anyway...

I came off my 2-year fixed rate, first time buyer mortgage product in Feb and onto Abbey's standard variable, currently at 4.24%. "Great", I thought, "I'm paying less now than I was on what at the time was a very good deal!" Now, a few things I've read and been told indicate that rates won't stay low for very long and may start to 'bounce' up and down, as can happen after a period of very quick deflation.

Unfortunately I have a shite loan to value of 87%, which puts me out of reach of the favourable mortgage products. Should I go with a 6% fixed rate now and be fucked whilst interest rates are low, or should I wait and get fucked later when they rise? Help!

hhmm Is this 6% fixed for at least five years?

Mortgage = 'Death Pledge'........you're in it for life mate, don't matter what you do!

I am holding out to see what happens in April as I want to fix for 5 years and overpay the mortgage so that I can halve the term. HSBC where doing a fixed at 3.99% I believe but you needed a better LTV rate, luckily I come in at 30% and I am tempted.

Overpay as much as possible before you do the fixed rate deal that way more of your payments will be off the capital.

How is LTV calculated? Ahh.. http://realestate.about.com/od/knowthemath/ht/loan_to_value.htm

I wonder if I should buy a house while the rates are low or wait?

Not that there has been any deflation. The CPI is down to 0%, but the RPI is still hitting 3.2% (see here). I would take RPI as the best measure of inflation, given that the CPI includes house prices, which, although lower, are a much lumpier measure, and the market is currently extremely illiquid.

Ah, see how flimsy my understanding of the whole thing is!

Cheer everyone for your help. I might just bite the bullet and fix at 5.99% for 5 years. Apparently the 10-year average is 5.84% or something so, as has been said, it's a small premium for certainty. I have heard that 5 years is a good term to go for as the market is likely to be on the up in 2-3 years, so getting a product which lasts that long could shaft you when you come to remortgage amidst rising rates.

And cheers esp to Ben for the PM. Will give them a call.

Overpay as much as possible before you do the fixed rate deal that way more of your payments will be off the capital.

This assumes I have savings. Oh to have savings. Or enough income to overpay!

Just to Lazarus this thread- we have a 10% deposit, this puts us in the 5.1%-5.98% fixed rate band.

Does anyone know of any amazing deals that will enable us to save pots of lolly?

Over the next two years would be my period of interest.

Specifically I need to decide between a tracker that is 3.99% above the base rate, which currently gives 4.49%, or a fixed rate at 5.55(ish).

Advice please!

Silly question, but mortgage or savings?

Mortgage

Do you want me to PM you my mortgage womans' details?

Currently got an IFA looking at things, I should really wait until Monday to hear back from her as she knows what she is talking about and I don't- however I am impatient, and find myself looking at the mortgages on offer and wondering.

I'm more drawn to the fixed rate/period as otherwise my 3.99% tracker that looked so clever when the BoE rate was 0.5% would look not so clever when the BoE rate goes up to 5%...

How bout them Metz!?

Currently got an IFA looking at things, I should really wait until Monday to hear back from her as she knows what she is talking about and I don't- however I am impatient, and find myself looking at the mortgages on offer and wondering.

I'm more drawn to the fixed rate/period as otherwise my 3.99% tracker that looked so clever when the BoE rate was 0.5% would look not so clever when the BoE rate goes up to 5%...

A lot of what's advertised may not be available purely because the offers become "over subscribed" and you often end up get bumped along to the next best offer etc.

Base rate is unlikely to move before spring next year, and after that, even the most liberal estimates indicate that it should stay well below 2% until 2012.

EDIT: If it were my money, i'd take the tracker you mention. Get your IFA's view before jumping in thought

I'd refrain from going for a fixed rate for a while, some analysts suggest the current base rate (0.5%) will remain in place until 2014. The government themselves suggest it'll remain at this level until the end of 2011. A tracker makes more sense for the time being.

Well with a 3.99% tracker if the base rate went to 2% I would be looking at 5.99% for 2012.

Question is whether the base rate would stay at 1% for 2011, then it would make sense.

I wish I knew more about this!

Look at it another way - do you like being able to budget and know exactly how much your repayments will be each month or can you handle some flexibility with your payments? Essentially that's what you're choosing between.

Well I'd like to keep my mortgage payment to at or below my current rent.

The further below that the faster I will be able to afford to re-wire, plaster, paint, install new bathroom and kitchen.

A fixed rate of around 5.5% will make my mortgage payment just about bang on my current rent- but I will also have to pay a service charge and so forth.

If I could bank on the BoE rate staying at up to or below 2% until 2013 then I'm laughing with a tracker.

Hmm, kinda tough to weigh certainty against uncertainty......

Given that you can afford the currently offered fixed rate, I would grab that, especially as (I presume) your income is fixed.

*Disclaimer.... I so hated working in a private client environment that I started fixing bikes for a living......

Let me just look into my crystal ball.. I predict rates will merge.

I predict that there will soon be one huge thread on LFGSS and everything will be in there.

Any new threads that are started will be merged, resistance is futile, you will be assimilated.

I just got a 2 year tracker with the Skipton. I'm with Braker and can't see interest rates getting above 2% in that time. My reasoning (which is most probably simplistic and naive) is that as a lot of people are going to lose their jobs the only way not to completely sink them is if their mortgage payments are kept reasonable.