April 4th, 2012
Lenders are moving to severely reduce interest-only mortgages. Maximum loan to values have been reduced to around 50% and some lenders insist upon a repayment vehicle, with the sale of the house generally not being a suitable repayment vehicle.
This means that if you have an interest-only mortgage, your re-mortgage options are going to be restricted. It may be wise to consider re-mortgaging now, before the option is completely removed, or putting a repayment vehicle in place – switch to a repayment mortgage, or use an ISA or similar to plan to repay the mortgage upon maturity.
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March 14th, 2012
They have both increased them. This is just profiteering by both, as those who remain on those rates are generally those who are unable to re-mortgage due to lack of income or equity, or a poor credit history.
In Halifax’s case, they do offer alternative products based upon your loan to value, so it’s certainly possible to transfer to a cheaper deal. Contact us if you are in that position.
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March 14th, 2012
The LIBOR rate – at which banks lend to each other – is high again.
This has had a knock on effect and pushed mortgage rates upwards for new deals.
Will it last? Difficult to say, but deals are certainly not quite as good as they once were.
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October 5th, 2011
Amazing 2 year fixed rate mortgage.
If your mortgage is below £500k and you are after a 2 year fix, this is an excellent choice.
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September 14th, 2011
This is the single question I am asked most.
The answer depends upon how much of a risk you can afford to take. If you cannot afford rate increases because you do not have the spare cash, then my advice would be to fix. If you are lucky enough to have spare cash, then a tracker may be worth the risk, with low rates offering lower repayments.
Base rates do seem set to remain low for the next 2 years, but this assumes the markets are correct. As we have witnessed, the global economy is in a very unusual position and this makes forecasting difficult. We are also guessing what will happen to rates after 2 years – will they increase quickly or gently, what rates will be available once a 2 year or 3 year deal expires?
Nobody really knows the answer, hence fixing will allow you to have certainty, albeit it at a premium, whilst a tracker will allow lower repayments at the risk of sleepless nights, worrying about when rates will increase.
It’s not an easy choice!
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August 11th, 2011
How much cheaper can these deals get?!
65% loan to value, free valuation & legals, £999 for the 3 year deal, £1,999 for the 4 year deal.
I honestly think these rates will not be repeated in the future.
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August 6th, 2011
Not sure when to fix? Join the club.
However, inflation is starting to become a real problem and is eroding peoples spending power. There is a great deal of money in the economy – most of it very cheap money – and the inevitability of this is that it will force prices up. Add in various quantitative easing initiatives and inflation becomes a serious problem.
The only way to deal with this is to increase rates. With 5 year fixes now well below 4%, my advice would be to grab one now. There are even offset 5 year fixes available, so flexibility is great. Coventry have launched a range of fixes with no redemption penalties at all, so if rates somehow defy expectations (and economic theory) and remain low for a lot longer, you can remortgage away without paying a huge redemption fee.
I predict that rates have reached their lowest, especially fixed rates. Six months from now, they will be more expensive. A 5 year fix, costing 0.25% more, will be an extra £3,125 for a £250k mortgage. An extra 1% will set you back £12,500, serious amounts of money.
You should also consider equity. As interest rates increase, house prices will decrease – there can be little doubt that very cheap mortgages have maintained house prices at their current levels. As the best deals require an absolute minimum of 25% equity – and can increase to 40% and even 50% for some lenders – you may find that your equity decreases to such an extent that you are no longer able to get the best deals, instead having to take the next best deals available as your loan to value increases.
Again, this can be serious amounts of money. The difference between, for instance, the best 75% fix and the best 80% fix is at least 1%.
So if you are currently on a variable rate, please consider the risks you run by not fixing now. If rates increase and house prices decrease, you could find yourself in a double pincer that may turn out to be financially very expensive.
If in doubt, consider Accords 5 year deal. Two years as a tracker at base+1.64%, then 3 years at a fix at 3.64%. Both very, very good deals in their own rights but, when combined in this way, they represent amazingly good value and seem to be the answer to many peoples concerns. Get the benefit of low rates now, without the concern of worrying about when to fix and at what rate, as it’s all fixed in advance.
A, quite frankly, amazing deal that should be seriously considered, especially for those with large mortgages as it’s available up to £1.5m.
Please contact us for free advice if you wish to discuss this in detail.
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August 3rd, 2011
The “old” Northern Rock, Asset Management, are currently waiving redemption penalties for those who wish to remortgage.
So if you are an oldish NR customer, stuck in a high fixed rate, you can possibly save money by moving elsewhere.
Not sure? Let us know what you NR account number is and we can quickly find out for you.
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July 20th, 2011
If you have a Barclays current account, Woolwich special offers are open to you.
For instance, 2 year fixes at 2.49% for £999 – pretty amazing deal.
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July 18th, 2011
Accord are launching a very interesting 5 year deal. The first 2 years are trackers, the next 3 years are fixed – all at rates known in advance.
Several lenders have a tracker with an option to drop into a fix, but the fixed rate varies and is not known in advance, so this is a very interesting development.
Tracks at base + 1.69% for 2 years, then fixes at 3.64% for 3 years.
These are seriously good rates – 3.64% is market leading for a 5 year fix, so for the last 3 years of a five year deal is excellent value.
Fees are a bit steep, but you are buying 2 mortgages.
For those who do not want to fix yet because they think rates will stay low for a couple more years, this is the mortgage for you!
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