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mortgage fix or track?

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Hello all, I'm in the early stages of considering first mortgage options. I have a LTV of 63%-65% In current conditions with brexit uncertainty, I'm leaning towards a five year fix. Althou… Read More
northbank1886 Avatar
5m, 3d agoPosted 5 months, 3 days ago
Hello all,

I'm in the early stages of considering first mortgage options.

I have a LTV of 63%-65%

In current conditions with brexit uncertainty, I'm leaning towards a five year fix.

Although a tracker is an option.

Any advice would be appreciated

Would be helpful if in your post you add if it was "professional advice" or "non professional advice".
- GAVINLEWISHUKD
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northbank1886 Avatar
5m, 3d agoPosted 5 months, 3 days ago
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banned#1
Let me put it this way.

For the Bank of England to raise interest rates (more than a quarter or half percent) in the next few years would cripple the economy & they know it.
#2
If you are leaning towards a fixed, do it.

It's horses for courses, there isn't a one size fits all solution. We've never fixed, but our mortgage cost has never been high, any increase in rates/cost is easily absorbed.
#3
This is NOT the best place for mtg advice !!
#4
Both fix and trackers have advantages and disadvantages

you seem to be able to save, will you overpay on the mortgage or do you prefer to spend your cash on the latest gadget and you have big outgoings on paydays.

Personally I have a tracker but I save/overpay at least double my monthly rate..
A fix is in effect an insurance policy to cover the risk of interest rates rising as with all insurance the more cover the higher the insurance premium.

Look at the rates and compare one to another, I am currently remortgaging and luckily can port my tracker to the new mortgage and take out the difference as a fix or tracker.
I needed an additional £75k, I looked at tracker and a five year fix, I decided on the 5 year fix, the reason. it was £15 more a month, if the base rate goes up 0.25% then it's break even, I can't see base rate going up in the next 2-3 years, but after that who knows.

Looks at the fees upfront and also the SVR at the end of the fix, as you will likely go onto 3-4% (based on current BOE Base rate).

Ps. A tracker follows a base rate at a fixed percentage, in times of rising base rates, a fix will only last so long and yes you may save greatly in those years, but once the fix ends you.ll still be paying a higher percentage, plus the fees to fix may be higher.

As others say you need to see a good/recommended mortgage advisor and make sure they ask difficult and in depth questions, that's the only way to truely understand what type of mortgage is best for you

Edited By: whatyadoinsucka on Jan 22, 2017 07:35: Updated
#5
look for Martin Lewis programme I think he discussed this last week. As inflation is at 1.6% the bank of England lending rate may get pushed up. thus all unfixed loans will become more expensive.
banned#6
IV always fixed mine.
#7
sofiasar
IV always fixed mine.


+1 :)
#8
Seems you are are quite close to 60% LTV, I haven't checked the market recently but will you get a better rate fixing at 60 LTV rather than 65?

Take a look a short term deals and see how much you would save over 2 years so you can compare, I personally went for a santander variable which also offers cashback on payments and also has no early repayment charge (in case my circumstances change in future, or I choose to change lend agreement/product).

The only issue with long term fixed is you are often stuck with it, and you often need to pay x percent should you want to change it during that time.

Having said the above there is a lot of guesswork involved no matter who you ask (even the industry experts get it wrong regularly), we know any future rise would be slow and gradual, but we do not know how far off that is or where it will stop. You have to weigh up keeping peice of mind vs your desire to get the best deal available.

Anyway as an example :

If a 65 LTV 5 year fixed was 2.25%, and a 65 LTV 2 year tracker was 1.25% you would pay roughly £1000 more interest payments a year for every 100k borrowed. So put another way you could pay off an extra £1k off what you owe each year without spending any more than you would have on the fixed deal (in reality it's a bit less as you usually add a product fee to the mortgage etc, which would be more frequent on a short term deal). If you are borrowing less than 100k, then obviously the benefits of a short term deal are less appealing as you will save less.

I would recommend finding a mortgage broker and discussing with them, many are completely free as they get commission from the lenders. Any worth their salt should be willing to offer free advice at a minimum. They can also show you exactly what the benefits of each option is.

No idea if the above helps, but good luck anyway. :)

Edited By: delusion on Jan 22, 2017 10:05: Lots of typos :/
#9
Quite a few lenders band at 60% LTV. Whether you go for fixed or tracked, maybe the best thing to do is focus on any options you have now to get down to that level (if at all possible) to benefit from the best rates available?


Edited By: morgie on Jan 22, 2017 09:54
#10
prash_2k
This is NOT the best place for mtg advice !!

Asking for opinions on fixed vs trackers is not mortgage advice
#11
prash_2k
This is NOT the best place for mtg advice !!

I'm inclined to agree. You will likely only receive 'opinions' here, which should not be treated as 'advice'.
#12
nbgrobbo
prash_2k
This is NOT the best place for mtg advice !!
Asking for opinions on fixed vs trackers is not mortgage advice

I think it is.
#13
LeanSigma
nbgrobbo
prash_2k
This is NOT the best place for mtg advice !!
Asking for opinions on fixed vs trackers is not mortgage advice
I think it is.

As someone who works in the industry, I assure you otherwise!
#14
LeanSigma
prash_2k
This is NOT the best place for mtg advice !!
I'm inclined to agree. You will likely only receive 'opinions' here, which should not be treated as 'advice'.

But the more "opinions" you have will help you make a more informed choice. Getting advice from a mortgage broker is only his 'opinion' as the major deciding factor (interest rate movement) is unknown.

Best to sit down put all the numbers into an spread sheet and then look at your situation and how you work with your income and then choose what's best for you.
#15
With hindsight I would never fix a mortgage rate. 4 out of the 5 deals I had were fixed rates. Paid £2000 to get our of a 10 year fix at one point. Every fix I have had turned out to be the worst option Always go for the cheapest option and don't worry about the future rates. Also over pay if only by a small amount.
#16
wayners
With hindsight I would never fix a mortgage rate. 4 out of the 5 deals I had were fixed rates. Paid £2000 to get our of a 10 year fix at one point. Every fix I have had turned out to be the worst option Always go for the cheapest option and don't worry about the future rates. Also over pay if only by a small amount.

Was that your choice or "advice" from experts?
#17
Personally I would fix it because the rates are pretty much at an all time low.
The whole Brexit thing is causing a lot of uncertainty and if they actually invoke article 50 no-one knows what will happen.
#18
Hmmm so your about to change the conditions of most likely the single biggest purchase you will ever make in your life.
And you think it's a good idea to take advice from people on a Forum.

I love free advice as much as the next guy. But when your talking £100,000 plus and a
Long term commitment, I think it's a good idea to ask as many PROFESSIONALS as possible.

There may be a few current or ex mtg advisors here. But if they're that good they would have a queue of ppl willing to pay for advice.
#19
prash_2k
Hmmm so your about to change the conditions of most likely the single biggest purchase you will ever make in your life.
And you think it's a good idea to take advice from people on a Forum.
I love free advice as much as the next guy. But when your talking £100,000 plus and a
Long term commitment, I think it's a good idea to ask as many PROFESSIONALS as possible.
There may be a few current or ex mtg advisors here. But if they're that good they would have a queue of ppl willing to pay for advice.

Asking on a forum makes loads of sense. Lots of perspective form many different people will help you make an informed choice.
Would you buy a car based just on what the sales man told you? No you would ask real people on a forum. Why would you not do that for a mortgage!?
#20
I always used to go for fixed rate mortgages because it gave me peace of mind knowing that my repayments would not increase.

However, I fixed my mortgage at 5.5 % in March 2008 for 10 years and the global financial crisis was not foreseeable.

If I had have gone for a tracker or standard variable rate mortgage, I could have saved myself quite a lot of money.

In times like these, with lenders potentially increasing their rates in line with inflation, a long term fixed rate mortgage could save you money in the long run.
#21
GAVINLEWISHUKD
prash_2k
Hmmm so your about to change the conditions of most likely the single biggest purchase you will ever make in your life.
And you think it's a good idea to take advice from people on a Forum.
I love free advice as much as the next guy. But when your talking £100,000 plus and a
Long term commitment, I think it's a good idea to ask as many PROFESSIONALS as possible.
There may be a few current or ex mtg advisors here. But if they're that good they would have a queue of ppl willing to pay for advice.

Asking on a forum makes loads of sense. Lots of perspective form many different people will help you make an informed choice.
Would you buy a car based just on what the sales man told you? No you would ask real people on a forum. Why would you not do that for a mortgage!?



No I wouldn't buy a car based on what the salesmen said. The same way I wouldn't buy a car if Dave down the pub gave me his
2 pence on a DB9 when the guy has only
Driven an Astra

On the other hand if Dave was a mechanic I could trust or knew a few mechanics we could trust then kool take the advice.

Like I said seek professional advice, free, paid whatever u want but seek PROFESSIONAL advice.

Not a bunch of ppl on a forum who have very little or no experience with mtg's.

Considering the current economic instability maybe reading the Bank of England economist forecast is a good start.

Fact is; this is a very lazy way to get advice on the biggest purchase you will ever make.
#22
cliosport65
sofiasar
IV always fixed mine.
+1 :)
+2 8)
#23
Loving the covno above. Hes asking opinions leave the man alone. As for asknig professionals... right because brokers dont work on commission its all corrupt anyways.

For me I fix purely and simply because I like paying the same every month. tracker may be slightly cheaper but not a huge amount and true interest rates may not go up a blistering amount to cause problems but I have the peace of mind that if they do Im already budgetted to pay my mortgage.
#24
prash_2k
GAVINLEWISHUKD
prash_2k
Hmmm so your about to change the conditions of most likely the single biggest purchase you will ever make in your life.
And you think it's a good idea to take advice from people on a Forum.
I love free advice as much as the next guy. But when your talking £100,000 plus and a
Long term commitment, I think it's a good idea to ask as many PROFESSIONALS as possible.
There may be a few current or ex mtg advisors here. But if they're that good they would have a queue of ppl willing to pay for advice.
Asking on a forum makes loads of sense. Lots of perspective form many different people will help you make an informed choice.
Would you buy a car based just on what the sales man told you? No you would ask real people on a forum. Why would you not do that for a mortgage!?


No I wouldn't buy a car based on what the salesmen said. The same way I wouldn't buy a car if Dave down the pub gave me his
2 pence on a DB9 when the guy has only
Driven an Astra

On the other hand if Dave was a mechanic I could trust or knew a few mechanics we could trust then kool take the advice.

Like I said seek professional advice, free, paid whatever u want but seek PROFESSIONAL advice.

Not a bunch of ppl on a forum who have very little or no experience with mtg's.

Considering the current economic instability maybe reading the Bank of England economist forecast is a good start.

Fact is; this is a very lazy way to get advice on the biggest purchase you will ever make.


what a stupid response. fact 1) these professionals more than often work on commission so they are biased towards which pay more. fact 2) theres no harm in asking for peoples advice or opinions on anything, thats why we have free speech. Fact 3) hes asking PROFESSIONAL people. people that actually have the mortgages, not the people that sell them. as per your poor car analogy hes asking the drivers instead of the salesman.

SO glad your not a mod
#25
prash_2k
GAVINLEWISHUKD
prash_2k
Hmmm so your about to change the conditions of most likely the single biggest purchase you will ever make in your life.
And you think it's a good idea to take advice from people on a Forum.
I love free advice as much as the next guy. But when your talking £100,000 plus and a
Long term commitment, I think it's a good idea to ask as many PROFESSIONALS as possible.
There may be a few current or ex mtg advisors here. But if they're that good they would have a queue of ppl willing to pay for advice.
Asking on a forum makes loads of sense. Lots of perspective form many different people will help you make an informed choice.
Would you buy a car based just on what the sales man told you? No you would ask real people on a forum. Why would you not do that for a mortgage!?
No I wouldn't buy a car based on what the salesmen said. The same way I wouldn't buy a car if Dave down the pub gave me his
2 pence on a DB9 when the guy has only
Driven an Astra
On the other hand if Dave was a mechanic I could trust or knew a few mechanics we could trust then kool take the advice.
Like I said seek professional advice, free, paid whatever u want but seek PROFESSIONAL advice.
Not a bunch of ppl on a forum who have very little or no experience with mtg's.
Considering the current economic instability maybe reading the Bank of England economist forecast is a good start.
Fact is; this is a very lazy way to get advice on the biggest purchase you will ever make.

Exactly. All I am saying is don't trust a mortgage salesman either.

How many of the people above that got a bum deal from professional advice? Most likely all of them.

I'm not saying don't dismiss professional advice nor should you dismiss people on a money saving forum. Use it all to make an informed choice.
Knowbody knows you and your money better than yourself.
#26
I think you should see for you because everyone situation is different or like me just ring ur current provider and see what they can offer I. e how much the rate would be for a fixed rate mortgage for 2 3 and 5 years and see...when we rang the 5 years and 3 was same price per month so we fixed it for the 5 yrs for the peace of mind hopefully in time for next elections but don't go longer than 10....hope I helped a little

Edited By: sum786 on Jan 22, 2017 11:52: spelling mistakes made
#27
look at the sums and work it out. personally I think the tides are about to turn with most things going up in price due to the brexit and Mr Trump's in power. mortgage rates will most likely go up whether that causes house prices to crash or just by say 5% over the next 5 /10 years is anyone's guess. what's the difference between the both will should be your most important factor to consider. the difference will probably be around 500/1000 pounds a year at most depending on ur loan amount if u fix for 3 5 years the difference will probably be negligible if even if prices go up but if they don't u will lose out but if any longer then u maybe better or worse off. 1 other thing to consider is from here can it go much further down I think not and if it went up by 10% would u easily be able afford it if not then I would go towards a 7 / 10/year fixed and try and pay off as much as u can the capital as soon as u can.
#28
Thanks for all the advice,
mostly very helpful
I'm going for security and will fix.

thanks again :-)
#29
northbank1886
Thanks for all the advice,
mostly very helpful
I'm going for security and will fix.

thanks again :-)


how u decided for how long yet or still looking into the figures.
#30
minimum 5 year
I'm of the opinion that rates will rise but not this year but when they do it could be messy and jump 2 or 3% over the space of a year or two.

I definitely won't be moving on from this place for at least 5 years so a fixing for the long with no penalty for over payment would be a preference.
#31
GAVINLEWISHUKD
wayners
With hindsight I would never fix a mortgage rate. 4 out of the 5 deals I had were fixed rates. Paid £2000 to get our of a 10 year fix at one point. Every fix I have had turned out to be the worst option Always go for the cheapest option and don't worry about the future rates. Also over pay if only by a small amount.

Was that your choice or "advice" from experts?


Not much I could do. We had a child and needed to move or extend. I was paying 9.95% ish fixed for 10 years.8 years in i had to get out as I was remortgaging and that came with a penalty. I then went on another 3.99% fixed for 2 years. Even that was wrong because the rate fell. That was it. Never fixed again. My current rate is 49% above bank rate tracked.Quids in now as still on it and paying twice as much as I need to.
#32
northbank1886
minimum 5 year
I'm of the opinion that rates will rise but not this year but when they do it could be messy and jump 2 or 3% over the space of a year or two.
I definitely won't be moving on from this place for at least 5 years so a fixing for the long with no penalty for over payment would be a preference.

The majority, but certainly not all, allow overpayments of 10% per year and can be ported/transferred to another property
#33
prash_2k
This is NOT the best place for mtg advice !!

I wouldn't say this website was the place to discuss the EU, like your thread seen here but hey ho.


Edited By: andynicol on Jan 22, 2017 15:08
#34
wayners
GAVINLEWISHUKD
wayners
With hindsight I would never fix a mortgage rate. 4 out of the 5 deals I had were fixed rates. Paid £2000 to get our of a 10 year fix at one point. Every fix I have had turned out to be the worst option Always go for the cheapest option and don't worry about the future rates. Also over pay if only by a small amount.
Was that your choice or "advice" from experts?
Not much I could do. We had a child and needed to move or extend. I was paying 9.95% ish fixed for 10 years.8 years in i had to get out as I was remortgaging and that came with a penalty. I then went on another 3.99% fixed for 2 years. Even that was wrong because the rate fell. That was it. Never fixed again. My current rate is 49% above bank rate tracked.Quids in now as still on it and paying twice as much as I need to.

My question was less of why but was choosing them all of your choice or did a "professional" advise on then and you took the advice?
#35
GAVINLEWISHUKD
wayners
GAVINLEWISHUKD
wayners
With hindsight I would never fix a mortgage rate. 4 out of the 5 deals I had were fixed rates. Paid £2000 to get our of a 10 year fix at one point. Every fix I have had turned out to be the worst option Always go for the cheapest option and don't worry about the future rates. Also over pay if only by a small amount.
Was that your choice or "advice" from experts?
Not much I could do. We had a child and needed to move or extend. I was paying 9.95% ish fixed for 10 years.8 years in i had to get out as I was remortgaging and that came with a penalty. I then went on another 3.99% fixed for 2 years. Even that was wrong because the rate fell. That was it. Never fixed again. My current rate is 49% above bank rate tracked.Quids in now as still on it and paying twice as much as I need to.

My question was less of why but was choosing them all of your choice or did a "professional" advise on then and you took the advice?


Ah. It was through barclays bank mortgage center. I tried 3 banks but ended up with my current provider. I found that they offer you options and explain them but don't advise which is best.That was 2005. I fixed for 2 years. How things have changed now. I hope never to see another mortgage seller.
#36
prash_2k
GAVINLEWISHUKD
prash_2k
Hmmm so your about to change the conditions of most likely the single biggest purchase you will ever make in your life.
And you think it's a good idea to take advice from people on a Forum.
I love free advice as much as the next guy. But when your talking £100,000 plus and a
Long term commitment, I think it's a good idea to ask as many PROFESSIONALS as possible.
There may be a few current or ex mtg advisors here. But if they're that good they would have a queue of ppl willing to pay for advice.
Asking on a forum makes loads of sense. Lots of perspective form many different people will help you make an informed choice.
Would you buy a car based just on what the sales man told you? No you would ask real people on a forum. Why would you not do that for a mortgage!?
No I wouldn't buy a car based on what the salesmen said. The same way I wouldn't buy a car if Dave down the pub gave me his
2 pence on a DB9 when the guy has only
Driven an Astra
On the other hand if Dave was a mechanic I could trust or knew a few mechanics we could trust then kool take the advice.
Like I said seek professional advice, free, paid whatever u want but seek PROFESSIONAL advice.
Not a bunch of ppl on a forum who have very little or no experience with mtg's.
Considering the current economic instability maybe reading the Bank of England economist forecast is a good start.
Fact is; this is a very lazy way to get advice on the biggest purchase you will ever make.
If anyone were able to predict interest rates they wouldn't be wasting their time working as a mortgage advisor. Of course an advisor can give info on the consequences of wanting to change deal etc but not on whether rate rises will make amfix or tracker cheaper long term.
#37
IMHO rate rises would break this fragile UK economy, we will all have to deal with rising prices/inflation.
my main concern is losing my job, in which case fixed or variable, i still couldnt pay it long term, hence variable for me, as you will likely pay a lower interest over the lifetime (x% above base) rather than switching between fix after fix (and potentialy getting lucky with timings of rate rises), fixes long term will always be more expensive than a good tracker if you can afford to overpay.
Remember trackers tend to have no overpayment limit so get it on the longest term possible to reduce the capital repayment element of the total monthly payment. On a £100k mortgage over 20 years cap repayment would be £417 a month but take it to a 30 year term capital repayment is only £278 a month.
Interest wise you'll pay on the outstanding balance each month until its paid off.

Edited By: whatyadoinsucka on Jan 23, 2017 09:22: aa

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