10 year fixed rate mortgage 60% LTV: First Direct 2.89%
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10 year fixed rate mortgage 60% LTV: First Direct 2.89%

282
Found 14th Feb 2016
Excellent deal. Most past deals have had pretty high fees. This one is fee-free.

I don't think rates will rise for quite a while but 2.89% is a great rate for 10 years peace of mind.

Another great thing about First Direct is that early repayment charges, whilst present, are significantly below those on typical 10 year fixed rate mortgages - 3% in the first year or 2% in any subsequent year.
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Tempting, I'm on 1.79 tracker at the moment with FD.
The 75% LTV fee-free version is only 0.1% extra at 2.99%.
Edited by: "marathonic" 14th Feb 2016
On one hand you have the 'security' of knowing your rate will not change over the next 10 years. On the other you are stuck with an early repayment charge for all of that time.

I never get tempted by these long term mortgages personally, with a 60 percent LTV you could get a rate 1-1.5 percent lower than this on a short deal. Saving thousands per year and also the option of no ERC.

Seems a lot to lose just for peace of mind that your rates payable will not change over a longer period. Just my opinion
Edited by: "delusion" 14th Feb 2016
What is a mortgage?
fo_sho_yo

It's kind of like an STD but costs lots of money and makes you lose your … It's kind of like an STD but costs lots of money and makes you lose your house when you don't pay it.



In some respects similar to having a WIFE then?
10 years is a hellova commitment, as decent as the rate is - let's be honest you won't get a rate like this in 5/6 years time! But still....big commitment when so much can happen and change in one's life in 10 years.
JPS

10 years is a hellova commitment, as decent as the rate is - let's be … 10 years is a hellova commitment, as decent as the rate is - let's be honest you won't get a rate like this in 5/6 years time! But still....big commitment when so much can happen and change in one's life in 10 years.



Yeah, it's a long term but that's why there are so many products on the market - this product doesn't offer the flexibility a lot of people need, but it does offer the security a lot of others do.

Everyone has different requirements and this is the next deal for this with a requirement of security in repayments for 10 years.

It obviously won't be suitable for those still moving up the property ladder but may be perfect for those with a tight budget and currently residing in their 'forever' home.

Obviously, circumstances can change but, after the first year, early repayment charges on this mortgage are only 2% which is a low price to pay when compared to the 7% I've seen on other products (there are probably others even higher).
Take, for example, a couple in an area with a good school in a house that they see themselves living in for the long term where one partner has just fallen pregnant with the first of a few planned children.

For this hypothetical couple, knowing that they'll be paying 2.89% until the first child is 10 years old may be more desirable than paying 1% less for the next two years but facing a possibility of paying 4%+ during the years after the birth of their 2nd or 3rd child - just when one of them comes off the labour market and their budget gets a whole lot tighter.
Edited by: "marathonic" 14th Feb 2016
Could you move this mortgage if you moved ? (Hope it is not a daft question!)
JPS

let's be honest you won't get a rate like this in 5/6 years time!.



Really? People are paid to take out mortgages in some countries in Europe like Denmark for example, you never know.
muffboy

What is a mortgage?



​It's when you get married and part of your life is owned by someone else, you will struggle to pay your debts back to regain it.
These fixed rates are always portable if you move home. Yoi just port the mortgage across. So no idea why everyone here is making a fuss of stating these wont be suitable if u r still moving up the property ladder etc etc
thepharmacist

Could you move this mortgage if you moved ? (Hope it is not a daft … Could you move this mortgage if you moved ? (Hope it is not a daft question!)


Usually yep. As long as the next property meets their lending criteria.
Brilliant deal and should hit 1k+ heat. Similar headline rates were available around this time last year but the fact this product has no fees and very low ERC makes it a winner in my eyes. If I was taking out a mortgage today I'd get this - just got to hope it is still around when we look to move in about 6 months time.

edit: reading the small print one thing I did notice was that the ERC applies to the original mortgage amount so if you took out say a £500k mortgage over 11 years and repaid it after 9 years you'd be getting seriously screwed over as you'd have to pay a £10k ERC. Not sure how this compares to other lenders but I think Halifax may charge based on how much you owe, not what the original amount was.
Edited by: "HangTime" 14th Feb 2016
Do you have to bank with these guys or can you get the deal as a current non banking customer?

For me the math is simple. If a bank, which is in the business of making money, can offer a 10 year 2.89% mortgage, that tells you where they think interest rates are going.

The answer is nowhere, as I have been saying for years. Every other month an interest rate rise is mooted, and then lo and behold something comes along which means is doesn't happen - the financial industry is playing games with the Great British public

Let's be clear - any significant rise in rates means the UK is bust - plain and simple.

If you want to know where the UK interest rates are going the check Japan - virtually 0% for 20 years, and now they have negative interest rates.

Save your money and let your mortgage stay variable.....
muffboy

In some respects similar to having a WIFE then?



It's a better investment than a wife as you get something back when you paid into it for years
pikeybaby

For me the math is simple. If a bank, which is in the business of making … For me the math is simple. If a bank, which is in the business of making money, can offer a 10 year 2.89% mortgage, that tells you where they think interest rates are going.The answer is nowhere, as I have been saying for years. Every other month an interest rate rise is mooted, and then lo and behold something comes along which means is doesn't happen - the financial industry is playing games with the Great British publicLet's be clear - any significant rise in rates means the UK is bust - plain and simple.If you want to know where the UK interest rates are going the check Japan - virtually 0% for 20 years, and now they have negative interest rates.Save your money and let your mortgage stay variable.....



Yes I agree, I wouldn't have 5 years ago but it clearly looks like we are doomed to low interest for a long time, which is great for mortgages but pensions and savings are doomed for a long time
Ignore
Edited by: "HangTime" 14th Feb 2016
Shame it's only for 60%,my son and his wife are saving like mad for a deposit on their first home.
Deals like this would really attract first time buyers and without them, everything slows down.
pikeybaby

For me the math is simple. If a bank, which is in the business of making … For me the math is simple. If a bank, which is in the business of making money, can offer a 10 year 2.89% mortgage, that tells you where they think interest rates are going.The answer is nowhere, as I have been saying for years. Every other month an interest rate rise is mooted, and then lo and behold something comes along which means is doesn't happen - the financial industry is playing games with the Great British publicLet's be clear - any significant rise in rates means the UK is bust - plain and simple.If you want to know where the UK interest rates are going the check Japan - virtually 0% for 20 years, and now they have negative interest rates.Save your money and let your mortgage stay variable.....



​So you think taking a variable rate at the lower rate is better? Been offered a 3% with natwest a week ago fixed for 10 years. You really think rates are going to stay low? This is the banking sector after all where everyone's a loser except the bankers X)
louie-blue

Shame it's only for 60%,my son and his wife are saving like mad for a … Shame it's only for 60%,my son and his wife are saving like mad for a deposit on their first home. Deals like this would really attract first time buyers and without them, everything slows down.



​Yes but the rate is partly risk based. At lower ltvs the lender knows there is practically no chance of negative equity. For first time buyers, there are some good schemes like the help to buy scheme and the help to buy isa. The second will help to boost their deposit by a good chunk.
10 years is great till something better comes along and you stuck with this. Better till divorce comes along and your stick with this. Better until you need to withdraw equity to help kids and your stuck with this. Better till you need capital and your stuck with this. Better till you want to emigrate And your stuck with this. Banks are offering this because rates will stay low. Someone will be getting a large bonus for selling you this multiple times over. This is 1% more than a cheap tracker that's £100pm on my mortgage that pays for a small brand new car for the next 10 years renewed each 3 years. Think about how much you want to be shielded.
OrangeAgent

It's a better investment than a wife as you get something back when you … It's a better investment than a wife as you get something back when you paid into it for years



​and it will be more desirable in 10 years time...
pikeybaby

For me the math is simple. If a bank, which is in the business of making … For me the math is simple. If a bank, which is in the business of making money, can offer a 10 year 2.89% mortgage, that tells you where they think interest rates are going.



This shows a lack of understanding of financial markets. The bank actually sell on the debt immediately and their profit is guaranteed regardless of the direction of rates. Their only problems will arise for borrowers who stop paying - a matter that is, for the most part, unrelated to the future direction of rates. Indeed, the risk of default is likely lower on a fixed rate than it is on a rate with no theoretical upper limit.

With the above in mind, your argument changes to that of thinking rates are going nowhere because availability of a 10-year 2.89% rate shows you where investors in debt, not the bank, think rates are going.

The major flaw with this argument is that it assumes that investors don't get it wrong. Another flaw is that investors don't even need to get it wrong. Take, for example, a pension fund that's trying to offer pension payments to a group of people based on a £2 billion fund balance. Such a fund may invest £1 billion in the debt market at 1.5% fixed for 2-years and £1 billion at 2.89% fixed for 10-years. This doesn't necessarily mean that they don't think rates will rise - just that they need a better return on their capital in the near term in order to meet their pension payment obligations.
Some are suggesting there could be a reduction in the BOE base rate
That may be why a sub 3% 10 year fix has reappeared.

It does provide some security especially if the housing bubble bursts in the next 10 years and you don't have such a good LTV.

I'm not sure what to do as have a lifetime 2% tracker and the facility of a mortgage holiday which not many new mortgages have now.
pauline_fb

​Yes but the rate is partly risk based. At lower ltvs the lender knows t … ​Yes but the rate is partly risk based. At lower ltvs the lender knows there is practically no chance of negative equity. For first time buyers, there are some good schemes like the help to buy scheme and the help to buy isa. The second will help to boost their deposit by a good chunk.



My IFA recently advised me to steer away from any 'help to buy' schemes, and I agree with him. Since when did the government wish to help out exactly?
marathonic

This shows a lack of understanding of financial markets. The bank … This shows a lack of understanding of financial markets. The bank actually sell on the debt immediately and their profit is guaranteed regardless of the direction of rates. Their only problems will arise for borrowers who stop paying - a matter that is, for the most part, unrelated to the future direction of rates. Indeed, the risk of default is likely lower on a fixed rate than it is on a rate with no theoretical upper limit.With the above in mind, your argument changes to that of thinking rates are going nowhere because availability of a 10-year 2.89% rate shows you where investors in debt, not the bank, think rates are going.The major flaw with this argument is that it assumes that investors don't get it wrong. Another flaw is that investors don't even need to get it wrong. Take, for example, a pension fund that's trying to offer pension payments to a group of people based on a £2 billion fund balance. Such a fund may invest £1 billion in the debt market at 1.5% fixed for 2-years and £1 billion at 2.89% fixed for 10-years. This doesn't necessarily mean that they don't think rates will rise - just that they need a better return on their capital in the near term in order to meet their pension payment obligations.




And yet, as repeatedly predicted, rates have gone nowhere for 7 odd years, and look set to go exactly nowhere. Feel free to bookmark my post so you can see how right I am in 2-5 years time

The UK is bust if rates rise to any degree any time soon. It's the threat of an imminent rise that keeps the market for these products active. Check news reports for the last few years and see the number of times we have been told a rate hike is due this month, or next quarter or imminently, then suddenly something happened to make it not so.

In a remarkably stupid move the US touched their rates up recently. It caused chaos and will have to be undone in very short order.
Personally I don't know how people have 60% equity. Do they rob a bank or something.
Bazaa7676

Personally I don't know how people have 60% equity. Do they rob a bank or … Personally I don't know how people have 60% equity. Do they rob a bank or something.



The majority of first time buyers won't have 40% equity (not the 60% equity you refer to).

This mortgage is usually taken out by home movers or those that are a few years into whatever initial mortgage deal they took and are now in a position to remortgage.
Bazaa7676

Personally I don't know how people have 60% equity. Do they rob a bank or … Personally I don't know how people have 60% equity. Do they rob a bank or something.



We've all got rich parents.
Mort Guage
Debt till death
New World Order
ewanyengi

Mort Guage Debt till deathNew World Order



My mortgage runs until I'm 55. I intend to live quite a bit longer.

Rent, on the other hand, could be considered as debt till death.
Good fixed deal but it would help remortgage customer if they can just shift the balance similar to CC balance trf as long as they meet credit score not list of income documents, statements, CC details etc. the whole lot to be offered. They would already have paying history from previous lender for affordability.
delusion

On one hand you have the 'security' of knowing your rate will not change … On one hand you have the 'security' of knowing your rate will not change over the next 10 years. On the other you are stuck with an early repayment charge for all of that time. I never get tempted by these long term mortgages personally, with a 60 percent LTV you could get a rate 1-1.5 percent lower than this on a short deal. Saving thousands per year and also the option of no ERC. Seems a lot to lose just for peace of mind that your rates payable will not change over a longer period. Just my opinion



I remember how happy I was to take a 10 year fix at 4.39% because (9 years ago) rates were predicted to rocket - expensive every month and to buy myself out of! This is still a great deal if you are stretching yourself and cannot afford for rates to rise. It will depend on your attitude to risk and personal circumstance.
louie-blue

Shame it's only for 60%,my son and his wife are saving like mad for a … Shame it's only for 60%,my son and his wife are saving like mad for a deposit on their first home. Deals like this would really attract first time buyers and without them, everything slows down.



There is 75% @ 2.99% and 85% LTV also available at slightly higher rate.
Sounds good
adi0604

Good fixed deal but it would help remortgage customer if they can just … Good fixed deal but it would help remortgage customer if they can just shift the balance similar to CC balance trf as long as they meet credit score not list of income documents, statements, CC details etc. the whole lot to be offered. They would already have paying history from previous lender for affordability.



In other words, should a lender trust the underwriting criteria of all the other lenders on the market without verification and should they just assume that the borrowers circumstances haven't changed in a significant manner, such as a dual income couple having just become a single income couple?

That will never happen, nor should it.
decent deal
louie-blue

Shame it's only for 60%,my son and his wife are saving like mad for a … Shame it's only for 60%,my son and his wife are saving like mad for a deposit on their first home. Deals like this would really attract first time buyers and without them, everything slows down.



​To me that's the problem; trying to save a deposit and getting on the property ladder. But me and wife opened a home saver account at Yorkshire Bank and we saved for our a year while gaining interest and managed to get a 10% deposit so Yorkshire Bank gave us £1000 cashback for saving up with them. Hope that helps any first time buyers.
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