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Tesco bank mortgage 1.68% five year fix (60%ltv) £995 fee
Tesco bank mortgage 1.68% five year fix (60%ltv) £995 fee

Tesco bank mortgage 1.68% five year fix (60%ltv) £995 fee

From mse

Tesco Bank has launched the new lowest five-year fixed-rate mortgage on the market – at 1.68% with a £995 fee if you borrow 60% of your home's value when you remortgage.

It's the cheapest deal out there for those looking to remortgage their home, according to David Hollingworth, associate director at broker L&C Mortgages. But it's not available to buyers. So have to go through l&c

One of the benefits of the Tesco Bank remortgage is that it comes with free valuation and free basic legal work which could save those looking to remortgage around £200 to £300 on the valuation and around £300 for basic legal work.

Not bad i pay 2.79% for my 5 year but two years into it still! You get clubcard points for your statement! Mortgage £1000 a month you get 250 points

26 Comments

Is there any professional advice, not private opinion please, on how brexit/general election will affect house prices? Wondering if a five year deal is too long?

House prices will plummet and rental prices will hit the roof. from an expert news watcher!

I doubt interest rates will rise that much in the next 5 years, but this is a low rate to lock into imo.

I'm 3 months away from coming out of a 5 year fixed that was 5%, the money I'm going to be saving soon is ridiculous!

davemhaynes

Is there any professional advice, not private opinion please, on how … Is there any professional advice, not private opinion please, on how brexit/general election will affect house prices? Wondering if a five year deal is too long?


House pricing is sort of irrelevant.
It's more a question of the strength of the economy.
You need to look at your own personal circumstances to decide whether you want the security of knowing what you will be paying for 5 years, or if you're happy to accept the risk that things may go up (or down!) in that time.

For what it's worth, I don't believe house prices will plummet as the UK market is firmly weighted in the 'demand' side of the supply and demand argument.
Unless the next government suddenly decides to build millions of new homes overnight that is!

nougat

House prices will plummet and rental prices will hit the roof. from an … House prices will plummet and rental prices will hit the roof. from an expert news watcher!



If house prices plummet rental yields will increase therefore rental prices will fall - simple supply/demand.

Its a good idea to work out what you'll actually pay. It may be the best mortgage if you keep it for long term or borrow a certain amount.

First Direct have a Fee Saver mortgage at 1.94%. OK, its higher %, but if you're borrowing say £100k, over say 25 years, then it works out about £15 a month more expensive. Most people will only keep fixed for the fixed term, in this case 5 years. So over the course of the 5 years, First Direct will be £15 * 12 (month) * 5 (years) = £900. More expensive ? No, because Tesco charges £995 for this mortgage, so makes it £95 more expensive.

It all depends on how much you borrow etc, how long you will keep the mortgage, maybe over 5 years potentially, so not saying FD is better, but be aware, and add the fee into your calculations and also the amount you borrow. If you're after 200k, then the Tesco one will be cheaper (by about £800 over 5 years !)..... FD also offer free legal fees/survey etc, and if you pull out with a week to go....no charge. Tesco....£995 once its booked in. Also First Direct offer unlimited over payments, which is unusual.

Point is, its a good deal, if the sums add up for your personal circumstance, and how you see things panning out. Im voting hot


MyBoozyHell

House pricing is sort of irrelevant.



I realise you say sort of, but I'm thinking it's pretty relevant if you're borderline/your house valued at a level that means you meet 60% LTV.

agree with all what Casino boss is saying. Here is my take on things at the moment I dont think there is a mortgage better than 1.94% over a 5 year period for fixed rate mortgages for some people with no fees.

What I found was on the run up to brexit vote costs of products rose, sterling dropped in value. We have 2 major changes potentially about to happen i.e. general election and brexit. Markets will respond accordingly which may force the bank of england to raise / lower rates. I dont see them lowering rates as this is historically the lowest they have ever been. What I see happening is round about 3-4 years time rates rising. They cant go on this low forever and there has been a few on the bank of england who are in favour at present or in the past to rise rates but didnt get enough of their coleagues to get the rates higher.

The market leading 2.49% 10 year deal is only .55% different between the 5 and 10 with unlimited overpayments from First direct. I see as I said earlier that rises will happen and by more than 1% between year 3-5 and will continue to rise and that is why I am currently going through a 10 year fixed. I am gambling that this happens and if I am right I will recoup any loss I make by not taking out that 5 year easily in year 5 onwards. Again your situation may be different from mine but its worth considering if only to rule in or out.

Question you need to ask is do you think in 5 years that the mortgages you will have to pick from if you need a mortgage will be less than .55% of a difference?

Edited by: "gandalf72" 7th Jun

davemhaynes

Is there any professional advice, not private opinion please, on how … Is there any professional advice, not private opinion please, on how brexit/general election will affect house prices? Wondering if a five year deal is too long?



Any professional advice that doesn't tell you this is the most uncertainty the property market has had in many years you should ignore.

Without a clear understanding of what terms brexit will have on the table at the end of negotiations its all guess work.

For example, imagine if 10% of eu citizens cut their stay short or move to mainland Europe. The amount of properties freed up would be massive in the short term reducing prices and rent return.

Longer term we are in a country with a growing population and less land to build more homes than the majority of other similar countries, so the home shortage is likely to continue and prices will rise again once balance and certainty is restored.

This is all guess work...

gandalf72

agree with all what Casino boss is saying. Here is my take on things at … agree with all what Casino boss is saying. Here is my take on things at the moment I dont think there is a mortgage better than 1.94% over a 5 year period for fixed rate mortgages for some people with no fees. What I found was on the run up to brexit vote costs of products rose, sterling dropped in value. We have 2 major changes potentially about to happen i.e. general election and brexit. Markets will respond accordingly which may force the bank of england to raise / lower rates. I dont see them lowering rates as this is historically the lowest they have ever been. What I see happening is round about 3-4 years time rates rising. They cant go on this low forever and there has been a few on the bank of england who are in favour at present or in the past to rise rates but didnt get enough of their coleagues to get the rates higher.The market leading 2.49% 10 year deal is only .55% different between the 5 and 10 with unlimited overpayments from First direct. I see as I said earlier that rises will happen and by more than 1% between year 3-5 and will continue to rise and that is why I am currently going through a 10 year fixed. I am gambling that this happens and if I am right I will recoup any loss I make by not taking out that 5 year easily in year 5 onwards. Again your situation may be different from mine but its worth considering if only to rule in or out.Question you need to ask is do you think in 5 years that the mortgages you will have to pick from if you need a mortgage will be less than .55% of a difference?



Good post, just just an additional point:

You also need to consider whether you are likely to want to move house in the next 2/5/10 years. Many mortgages are portable these days but if you plan to upsize (house and/or mortgage) as your next move, you could end up with a provider that won't lend the extra money to do so (i am told first direct have pretty strict criteria compared to others for example), thus having to pay the early exit fee, which in turn could eclipse any savings made from a long term fix.


Edited by: "rebelspawn" 7th Jun

davemhaynes

Is there any professional advice, not private opinion please, on how … Is there any professional advice, not private opinion please, on how brexit/general election will affect house prices? Wondering if a five year deal is too long?



As someone else has said here, future house prices are largely irrelevant to this mortgage offer. There is no requirement to repay or refinance at the end of the term (you just stay on the lender's SVR).

If you're looking for expert opinion, search for reports from the major lenders - Nationwide and Halifax. But even that I would treat with caution. When interest rates fell to current levels in 2009, few people thought we would still see them this low 8 years later. Few experts predicted the Brexit result. Or the stock-market bounce resulting from fall in exchange rates.

Better advice might be to look at your own circumstances and the impact of big market changes: could you afford it if rates rise by, say, 2%. What if house prices fall by 25% (could be no effect if you have no plans to move for the foreseeable future). How secure is your job? And what would be your prospects if you did lose it?

morgie

I realise you say sort of, but I'm thinking it's pretty relevant if … I realise you say sort of, but I'm thinking it's pretty relevant if you're borderline/your house valued at a level that means you meet 60% LTV.


This is very true and I didn't take account of that specific situation....
Then my next paragraph about personal circumstance kicks in really.
If you have concerns that your house price will fall over the next 5 years significantly enough that you would move above 60% LTV, then surely you've answered your own concern that you should be trying to grab the best deal now to get that security back?

Can someone please kindly give some advise?

My 2 year fixed at 2.29% is finishing at the end of this month and I've got under 60% ltv left so house worth over 140k and left 65k on mortgage.
My current provider is offering 2.69% for 2 years with no fee.

What shall i do?

took out their 1.92% no fees 5yr fixed

4447

Can someone please kindly give some advise?My 2 year fixed at 2.29% is … Can someone please kindly give some advise?My 2 year fixed at 2.29% is finishing at the end of this month and I've got under 60% ltv left so house worth over 140k and left 65k on mortgage. My current provider is offering 2.69% for 2 years with no fee. What shall i do?



hsbc.co.uk/1/2…000
HSBC are offereing 1.14% with a £1k fee as an example.

The rate your being offered does seem high, which would suggest they are covering their fee within the rate.

RCUK

https://www.hsbc.co.uk/1/2/mortgages/products?pcode=A004048933000000000000000000 HSBC are offereing 1.14% with a £1k fee as an example.The rate your being offered does seem high, which would suggest they are covering their fee within the rate.



​Thanks a lot

4447

Can someone please kindly give some advise?My 2 year fixed at 2.29% is … Can someone please kindly give some advise?My 2 year fixed at 2.29% is finishing at the end of this month and I've got under 60% ltv left so house worth over 140k and left 65k on mortgage. My current provider is offering 2.69% for 2 years with no fee. What shall i do?



The fee on the Tesco deal is just over 1.5% of your outstanding mortgage. Averaging over the five year period is about 0.3%. Add that to the rate, gives you just under 2% fixed rate for 5 years.

The HSBC deal has almost the same fee, and lower rate. Because it's only for 2 years, it averages out at 1.9%.

(These calculations are only approximations - an accurate calculation is much more complex - but they're good enough for this purpose)
I would go for the Tesco deal:
- it's a low overall rate. Who knows how and when interest rates will move, but the prevailing view is that they will start rising in a couple of years
- it's a long fix so you get certainty and also don't need to think about refinancing for a long time. .




pcs7038

The fee on the Tesco deal is just over 1.5% of your outstanding mortgage. … The fee on the Tesco deal is just over 1.5% of your outstanding mortgage. Averaging over the five year period is about 0.3%. Add that to the rate, gives you just under 2% fixed rate for 5 years.The HSBC deal has almost the same fee, and lower rate. Because it's only for 2 years, it averages out at 1.9%.(These calculations are only approximations - an accurate calculation is much more complex - but they're good enough for this purpose)I would go for the Tesco deal:- it's a low overall rate. Who knows how and when interest rates will move, but the prevailing view is that they will start rising in a couple of years- it's a long fix so you get certainty and also don't need to think about refinancing for a long time. .



​Thank you

Applied for 2 years fix @ 1.53%, well cheaper compare to most on various comparison websites.
Heat added.

Jerec

I doubt interest rates will rise that much in the next 5 years, but this … I doubt interest rates will rise that much in the next 5 years, but this is a low rate to lock into imo.I'm 3 months away from coming out of a 5 year fixed that was 5%, the money I'm going to be saving soon is ridiculous!



i remortgaged from 5.8% onto a 5 year fix at 3%, i kept my repayment the same amount and this reduced the remaining length of my mortgage by almost 50%.

4447

Can someone please kindly give some advise?My 2 year fixed at 2.29% is … Can someone please kindly give some advise?My 2 year fixed at 2.29% is finishing at the end of this month and I've got under 60% ltv left so house worth over 140k and left 65k on mortgage. My current provider is offering 2.69% for 2 years with no fee. What shall i do?


Ask a mortgage advisor like me for a quote.. not tied to one lender either.

How long before your fixed rate ends should you apply for a new mortgage? Mine ends on 31 October 2017 and this deal would be ideal.

fossman

How long before your fixed rate ends should you apply for a new mortgage? … How long before your fixed rate ends should you apply for a new mortgage? Mine ends on 31 October 2017 and this deal would be ideal.



If you repay your existing mortgagee before the end of the fixed rate period, you'll almost certainly have a penalty - check your documentation. I doubt that Tesco will hold the funds for you for nearly five months if you are re-mortgaging - but it only takes a call to find out.

You could always contact a broker like the earlier poster (but check his credentials if you do take specific advice from him/her outside these forums).

4447

Can someone please kindly give some advise?My 2 year fixed at 2.29% is … Can someone please kindly give some advise?My 2 year fixed at 2.29% is finishing at the end of this month and I've got under 60% ltv left so house worth over 140k and left 65k on mortgage. My current provider is offering 2.69% for 2 years with no fee. What shall i do?



​im not a mortgage adviser but Ive always been with Nationwide. With your figures as a new customer they would offer you a 2 year fixed @ 1.59% with no fee. same rate for a 2 year tracker with no fee. A 5 year is 2.09% no fee. my advice would be to leave your current provider as they are not competetive! my other advice would be to take a tracker for 2 years that has no early repayment charge and get it hammered with overpayments!

I am/was in the process of applying for the same product at 1.82% I called them on Saturday and they're happy to send a new offer for 1.68% As a result you've saved me £11/month, so £660 in total. So very, very grateful

davemhaynes

Is there any professional advice, not private opinion please, on how … Is there any professional advice, not private opinion please, on how brexit/general election will affect house prices? Wondering if a five year deal is too long?


I know you asked for professional advice, but I'd say that it's not just property prices you'd want to consider over 5yrs, but also interest rates and the benefits of being certain of your outgoings from a budgeting perspective. Personally, I'd expect that there will be a downward pressure on property prices in the most volatile regions and sectors (e.g. London high value) but over 5yrs I'd expect prices to be up (maybe way up) on where they are today. If the pound stays weak the pressure is on to raise interest rates, both to counter inflation (though this would largely be due to high import prices) and also to attract international funds to attract hot money (which moves to where interest rates are more attractive).
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