Interest rates

A weed is a plant for which no-one has found a money making use.
 
In the news today - Dutch inflation leaps to 17%, boosted by high energy prices. Wonder what their strategy will be?
 
Today I signed up to another 10 years at 3.05% fixed.

I had planned to remortgage another £200k over, for renovation work we wanted to do next spring. Instead we decided not to saddle ourselves with unnecessary debt and will move the build over a 5 year period using savings and shares.

So much for trickledown economics…
 
soulstyledevon said:
Today I signed up to another 10 years at 3.05% fixed.

I had planned to remortgage another £200k over, for renovation work we wanted to do next spring. Instead we decided not to saddle ourselves with unnecessary debt and will move the build over a 5 year period using savings and shares.

So much for trickledown economics…
Click to expand...

Ten years at 3.05% is pretty good. Were there any fees?
 
Amarillo said:
Ten years at 3.05% is pretty good. Were there any fees?
Click to expand...

£749.
We decided the long term stability worked for us. Even if the rates drop, i can't see them going back to the historically low rates we've seen these last 10 years.
We can make 10% (of balance) over payments each year during the period too.

I might kick myself locking in for such a long amount of time, but not half as much, as i regret not buying Tesla stock when it was affordable...
 
soulstyledevon said:
£749.
We decided the long term stability worked for us. Even if the rates drop, i can't see them going back to the historically low rates we've seen these last 10 years.
We can make 10% (of balance) over payments each year during the period too.

I might kick myself locking in for such a long amount of time, but not half as much, as i regret not buying Tesla stock when it was affordable...
Click to expand...
It sounds like a stunning deal. Yes - Britain might enter into a two year deep recession with interest rates tumbling to 0.1%, and ten year fixed rate deals for 1.99%. But what you have is certainty. Do you sums and see if you can overpay so the mortgage will be redeemed at the end of the ten year period.
 
Amarillo said:
It sounds like a stunning deal. Yes - Britain might enter into a two year deep recession with interest rates tumbling to 0.1%, and ten year fixed rate deals for 1.99%. But what you have is certainty. Do you sums and see if you can overpay so the mortgage will be redeemed at the end of the ten year period.
Click to expand...

I think I’ve found the deal.

9b244e46fc084d1278abce99751111c9.jpg


1 year fix 3.58% no fee.
2 year fix 3.22% £999. (£500 py)
3 year fix 3.30% £999. (£333 py)
5 year fix 3.23% £999. (£200 py)
7 year fix 3.18% £749. (£107 py)
10 year fix 3.05% £749. (£75 py)

This gives some indication of where the Barclays Boffins think interest rates will be headed over time. It is the reverse of how things were this time last year with a premium being demanded for longer fixes.
 
Amarillo said:
I think I’ve found the deal.

9b244e46fc084d1278abce99751111c9.jpg


1 year fix 3.58% no fee.
2 year fix 3.22% £999. (£500 py)
3 year fix 3.30% £999. (£333 py)
5 year fix 3.23% £999. (£200 py)
7 year fix 3.18% £749. (£107 py)
10 year fix 3.05% £749. (£75 py)

This gives some indication of where the Barclays Boffins think interest rates will be headed over time. It is the reverse of how things were this time last year with a premium being demanded for longer fixes.
Click to expand...

My wife and I were split.
I wanted to hit the 5 year fixed, she wanted the 10.
We went for the 10, but have shook on a 5 year £1000 bet. Considering how risk adverse she is, she still wanted the wager.
The stakes are high in this house…

I agree with you, our best bet, is to pay down each year and bring down the overall cost.
 
soulstyledevon said:
My wife and I were split.
I wanted to hit the 5 year fixed, she wanted the 10.
We went for the 10, but have shook on a 5 year £1000 bet. Considering how risk adverse she is, she still wanted the wager.
The stakes are high in this house…

I agree with you, our best bet, is to pay down each year and bring down the overall cost.
Click to expand...

I’m sure you know all this… but I’ll say it in case your advisor didn’t make it clear.

You can make a cash overpayment of 5% of your balance each year without penalty. This will reduce your monthly repayments, but will not affect the length of term.

You can make a regular overpayments of up to three times your minimum payment *less a penny* each month. This won’t affect the minimum monthly repayments but will reduce the term. These sort of overpayments go into an overpayment account which if you wanted/needed to could be dipped into monthly by reducing your monthly payments to below the minimum payment without affecting your credit rating.

For example, we have the equivalent of just over 40 months of minimum repayments in our overpayment account. This means that our current overall term of 25 years is reduced to 21 years 8 months or we could stop repayments for up to 40 months without any sort of penalty. As it happens, we have just done exactly that to divert the cash so we can reduce a BTL mortgage which has just 13 months remaining of a fixed rate.
 
@Amarillo whats your take on Independent Mortgage Advisors. Personally, I’ve never used one. I scan the market for the best policies I can find and approach the lender directly.
I can’t get my head around paying someone to do the search for me…???

As for Independents getting special deals, I don’t buy it. They charge you £500 for an appointment or receive commission from the lender on what they sell. Would they lead you to a product they can’t make anything from. I doubt it.
 
Amarillo said:
You can make a cash overpayment of 5% of your balance each year without penalty. This will reduce your monthly repayments, but will not affect the length of term.
Click to expand...

You can normally do up to 10%; Either monthly overpayment or lumpsum each year (but must be done each year, ie - you can’t just overpay by 20% in the 2nd year).

If done from day 1 you reduce your term from 25years to approx 17/18 years.

Important thing if household budget allows is to overpay from day 1, then you don’t notice the money has gone!
 
soulstyledevon said:
@Amarillo whats your take on Independent Mortgage Advisors. Personally, I’ve never used one. I scan the market for the best policies I can find and approach the lender directly.
I can’t get my head around paying someone to do the search for me…???

As for Independents getting special deals, I don’t buy it. They charge you £500 for an appointment or receive commission from the lender on what they sell. Would they lead you to a product they can’t make anything from. I doubt it.
Click to expand...

I’ve used independent advisors twice.

The first (1990) screwed me with a low start endowment policy, which he illustrated with a 6%, 8% and 10% growth forecasts, assuring me that there would be enough at the end of term - after paying off the mortgage - to buy a new car. (At the end of the term the policy paid out £25,000 for a £40,000 mortgage, 4.5% growth). At the time I questioned how it could be that a complicated investment procedure could possibly be better than a simple repayment mortgage and was told it was because I could maximise benefit from MIRAS for the full term.

The second one (2011) was much more helpful. I did a let-to-buy dual mortgage. I remortgaged my flat for 60% LTV and used that as a deposit for our house. He also suggested that at a time of low growth and low interest rates I should cash in equities and savings and invest in property.

I followed that advice and have seen our household net worth quadruple in the past 11 years.
 
Ch1pbutty said:
You can normally do up to 10%; Either monthly overpayment or lumpsum each year (but must be done each year, ie - you can’t just overpay by 20% in the 2nd year).

If done from day 1 you reduce your term from 25years to approx 17/18 years.

Important thing if household budget allows is to overpay from day 1, then you don’t notice the money has gone!
Click to expand...

Barclays have their own idiosyncrasies. On the ten year fix max lump sum is 5%. Any more that that and it’s a 5% penalty charge of the excess. This is true for the whole of the ten year fixed term.

However, you can make regular overpayments of three times the minimum payment (minus a penny) without penalty.
 
Amarillo said:
Barclays have their own idiosyncrasies. On the ten year fix max lump sum is 5%. Any more that that and it’s a 5% penalty charge of the excess. This is true for the whole of the ten year fixed term.

However, you can make regular overpayments of three times the minimum payment (minus a penny) without penalty.
Click to expand...

Are you sure @Amarillo .
We were told yesterday by Barclays, you can overpay 10% of the outstanding balance per year. Any more would result in a 5% penalty charge…
 
From Barclays FaQ


Is there a limit on the amount of mortgage overpayments I can make each year?

Most of our mortgages let you make additional payments of up to 10% of your mortgage balance in every 12-month period.

Please check your mortgage offer conditions, which we sent to you when you took out your loan, for your overpayment allowance.
 
Possibly crossed wires, but that falls under the ERC column.
You can still pay up to 10% per year off any current balance.

e.g.
You owe £300k at year one and decide to overpay 10% - £30k
Year two the balance will be reduced and again you can make another 10% payment to reduce the total by 10%
 
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