First Direct: 10-year fixed rate mortgage at 2.89%
326°Expired

First Direct: 10-year fixed rate mortgage at 2.89%

69
Found 6th Feb 2015
So how does this one beat the best Nationwide deals?

Well, for starters, it's available at 65% LTV.

In addition, the rate is 0.05% better than Nationwide's deal with a £49 lower fee (unless you're an existing customer, in which case, the rate is 0.05% higher than Nationwide's with a £49 lower fee).

Another advantage is that overpayments are unlimited - not restricted to 10% per year.

However, in my opinion, the greatest advantage of this deal over others is the significantly lower early repayment charges. Whilst Nationwide charge 7% in the first 4 years and then reduce this by 1% per year until the end of the 10 year fix, First Direct only charge 3% during the first year and 2% in any subsequent year.

69 Comments

What's this.. Mortgage, isa?intrrest currently account?

Cracking deal. I just wish they would do a better LTV; like 90%

Original Poster

ken-doh

Cracking deal. I just wish they would do a better LTV; like 90%



The highest LTV they offer a 10-year fix at is 85% - 4.29% with £950 fee.

However, in my opinion, a 10-year fix at high LTV's is a bad idea. Over the initial few years of your mortgage, you should expect your LTV to reduce through the expected increase in the value of your house as well as the monthly repayments towards capital. With this in mind, you should get access to better value products as the years go by.

If you lock yourself into an 85% LTV 10 year fix, it may not be a good idea to switch to these products as you'd be forced to pay the early repayment charges - although, in fairness, these are pretty low with First Direct long-term fixes when compared to industry standards.

I mean if they did 2.89% for 90% LTV

I have 90% too and my offer has been accepted so need to get my back side into gear and find the best deal I can

Good rate, quite tempting! Just be careful with the ERCs as for Nationwide it is a % of the outstanding balance, whereas First Direct is a % of the Original balance, so could actually work out a lot more expensive, depending on how much you have paid off...

Reading into this, it looks like you will need to include solicitor and survey fees which will put the initial cost up. Someone correct me if I'm wrong as I'm currently looking for remortgage deals.

If it was offset it would be beyond brilliant. Still hot though.

Monaco Blue

If it was offset it would be beyond brilliant. Still hot though.


YBS has a 5 year offset at around 2.65 - amazing deal....but the 10 year one shoots up unfortunatley

Is there is any deals on 80% LTV but can accept current immaculate mortgage payment history? as hate to go through all docs/income proof, etc again.

Google is your friend

Actually the nationwide fee is £499 now.

Original Poster

As far as I can see on their website, it's still a £999 fee - or fee free for a 0.1% higher rate. Both are their 10 year deals.

Is it transferable if you move homes? The early repayment charge of 2% after a year is good if true.

marathonic

The highest LTV they offer a 10-year fix at is 85% - 4.29% with £950 … The highest LTV they offer a 10-year fix at is 85% - 4.29% with £950 fee.However, in my opinion, a 10-year fix at high LTV's is a bad idea. Over the initial few years of your mortgage, you should expect your LTV to reduce through the expected increase in the value of your house as well as the monthly repayments towards capital. With this in mind, you should get access to better value products as the years go by. If you lock yourself into an 85% LTV 10 year fix, it may not be a good idea to switch to these products as you'd be forced to pay the early repayment charges - although, in fairness, these are pretty low with First Direct long-term fixes when compared to industry standards.



Can i have your email id please ?

marathonic

The highest LTV they offer a 10-year fix at is 85% - 4.29% with £950 … The highest LTV they offer a 10-year fix at is 85% - 4.29% with £950 fee.However, in my opinion, a 10-year fix at high LTV's is a bad idea. Over the initial few years of your mortgage, you should expect your LTV to reduce through the expected increase in the value of your house as well as the monthly repayments towards capital. With this in mind, you should get access to better value products as the years go by. If you lock yourself into an 85% LTV 10 year fix, it may not be a good idea to switch to these products as you'd be forced to pay the early repayment charges - although, in fairness, these are pretty low with First Direct long-term fixes when compared to industry standards.



So you'd get a better rate than this in 2/3/5 years time with a lower LTV would you. Dream on matey.

Original Poster

Yes, I would fully expect 10 year fixed rates at 60% LTV to be available at rates below 4.29% in 2/3/5 years time.

Only time will tell which of us is right. However, the spread between the 10 and 15 year UK gilt is less than 0.5% whilst the difference between current 65% LTV and 85% LTV 10 year fixed rate mortgage rates is 1.4%. This would suggest that the market agrees with me.

Edited by: "marathonic" 7th Feb 2015

Just pay cash no rate needed.

Today If i have the money to use this offer to take a loan with 65 % LTV, then i would have already had a house by this time.

we are looking to switch to a 10 yr fixed with nationwide in March. we are still in a five year fixed and will have 2 years left in March of that.
this first direct one is good too. I am existing customer of first direct so wonderful if they do better rates for existing customers...

we will hopefully have 60% ltv....don't know if to take the gamble in March and pay ,£3k redemption fee to switch or wait another year in case rates drop further!

So I could make significant over repayments with this mortgage but providing I still had a very small balance left to pay until the 10 years ran out then I would not be charged the early repayment charge?

10 year fixed rate with nationwide at 60% LTV = 2.94% with no Product fee.

Works out £5 a month dearer for me but saves £400 over the 10 year mortgage

£409.80 to be more precise, forgot that people like precision.

Looks a cracking deal! How long is it please before a current fixed mortgage expires before you can secure this with FD..?

Also would you go direct to the bank or source a broker to scan the whole market, just in case?

The TSB Fix and Flex seems better overall IMO

Nationwide no fee if you take 3.04%

What's the exit fee?

Original Poster

adamwilko007

Nationwide no fee if you take 3.04%



Yeah, maybe i should have included that information in my original post as it works out cheaper for those with mortgages below €65,000 or so - but without the advantages of First Directs product mentioned on the original post.

However, people should be able to work out which deal suits their circumstances better - the post was just to bring this one to their attention.

A £950 fee doesn't have too severe an impact on a 10 year fix as its only £95 per year. The impact of such a high fee is significant if it's on a 2 or 3 year deal the mortgagee is taking out.

Original Poster

adamwilko007

What's the exit fee?



Read the original post.

10 year fixed rate with nationwide at 60% LTV = 2.94% with no Product fee.

Works out £5 a month dearer for me but saves £400 over the 10 year mortgage

Davieb1982

10 year fixed rate with nationwide at 60% LTV = 2.94% with no Product … 10 year fixed rate with nationwide at 60% LTV = 2.94% with no Product fee.Works out £5 a month dearer for me but saves £400 over the 10 year mortgage



Sorry, should have put for existing nationwide customers whose deal is ending

marathonic

Read the original post.



Is the exit fee the early repayment that's what i meant even if I haven't overpaid I just wanted to swap product for example ? Thanks

Original Poster

Davieb1982

10 year fixed rate with nationwide at 60% LTV = 2.94% with no Product … 10 year fixed rate with nationwide at 60% LTV = 2.94% with no Product fee.Works out £5 a month dearer for me but saves £400 over the 10 year mortgage



Yeah, their existing customer deal works out better for those on low - midsize mortgages.

When a customer sticks with the mortgage for the full 10 years, it's only for mortgages of greater than about £190,000 that the First Direct deal works out cheaper, i.e. The rate difference covers the fee.

However, the Nationwide deal is still a killer if the person decides to, or is forced to through unforeseen circumstances, break the mortgage before the 10 years is up.

For example, a person on a £100,000 mortgage would pay £750'ish more over the first 4 years of the mortgage with First Direct when compared to Nationwides existing customer product.

However, if that person were to get divorced, relocate to a different part of the country whilst not in a postion to buy in that area, etc. the early repayment charges would be £2,000 with First Direct and over £6,000 with Nationwide.

If the person saw out the 10 year term, the First Direct deal works out £500'ish more expensive on this £100,000 mortgage.

The First Direct product does allow overpayments in excess of 10% per year - so if a customer is able to do this, they could save in excess of the £500 additional cost in interest too.

It's a tough decision and everyone needs to assess their own circumstances before deciding what to do.

Original Poster

adamwilko007

Is the exit fee the early repayment that's what i meant even if I haven't … Is the exit fee the early repayment that's what i meant even if I haven't overpaid I just wanted to swap product for example ? Thanks



It would apply to both - although the only reason for swapping product would be if cheaper rates became available - do you really see 5+ year fixed rate deals being available in 2/3/5 years at rates that are enough below 2.89% to justify paying an early repayment charge, no matter how low?

There is no charge for overpayments as long as you don't pay off the mortgage in full.

What's crazy is the thought that most people who have bought a house within the last 8 years won't have made a penny on their property as yet! When will this end!?

Original Poster

Comment

andykirby0

What's crazy is the thought that most people who have bought a house … What's crazy is the thought that most people who have bought a house within the last 8 years won't have made a penny on their property as yet! When will this end!?



What part of the country are you talking about? I believe most parts of the country have had property price rises.

I know that, here in Northern Ireland, prices are nowhere near peak levels and, if you happened to buy between 2006 and 2011, your property is likely to still be worth less than you paid for it.

However, outside this small buying window, money has been made. For example, I purchased in Q4 2012 and, during my recent remortgage, my property was valued at more than 20% above the price I paid.

No limit on overpaying and such low ERC make this a real deal! Thanks op

What are people's experience with first direct? I have always been the kind of guy who likes a physical bank /building society to go to

Original Poster

Comment

adamwilko007

No limit on overpaying and such low ERC make this a real deal! Thanks … No limit on overpaying and such low ERC make this a real deal! Thanks opWhat are people's experience with first direct? I have always been the kind of guy who likes a physical bank /building society to go to



I like First Direct. I rarely visit branches so having a top-class phone service is more important for me. Some of the branch based stuff can be done in HSBC branches.

Another trick for overpayments is to use their regular saver account. It allows lodgements of up to £300 per month and pays 6% AER for the year (4.8% net AER).

At the end of each 12 months, you can then transfer the entire £3,600 + interest to your mortgage and start a new regular saver.

adamwilko007

No limit on overpaying and such low ERC make this a real deal! Thanks … No limit on overpaying and such low ERC make this a real deal! Thanks opWhat are people's experience with first direct? I have always been the kind of guy who likes a physical bank /building society to go to


I have had no issues since remortgaging with them in 2010.
Previously with Nationwide (fixed for 10 years at 4.79% in 2006), and the switch across was effortless. Swapped to a 2.29% tracker.

I do most things online and make the odd call when needed, which are answered politely and efficiently.
I do wish that I could see my mortgage account online like I was able to do with the Nationwide.
Great service overall.
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