El Cid Posted March 17, 2017 Share Posted March 17, 2017 I may be getting a mortgage in the coming months. So I am comparing the different rates and banks/Building Societies. Would you just pick the cheapest? I understand that the fees need to be taken into account. Interest rates in the USA have just gone up, will our rates follow? I did hear that they would, not sure if it was Robert Peston that said so. Link to comment Share on other sites More sharing options...
andrejuan Posted March 17, 2017 Share Posted March 17, 2017 This is not a bad starting point. http://www.moneysavingexpert.com/mortgages/ Link to comment Share on other sites More sharing options...
tzijlstra Posted March 17, 2017 Share Posted March 17, 2017 If the value of the GBP keeps falling the BoE will have to increase interest rates to shore it up (once it breaks through a barrier that might already have been broken.) Interest rates are only going one way, up. Tie it down for a significant period (10 years if you can find it?) would be my advice. It might be more expensive now, but will really benefit you later. Of course, every mortgage and provider has different clauses and that is something you really need to be aware of: Don't sign a mortgage without understanding fully the terms and conditions. Link to comment Share on other sites More sharing options...
El Cid Posted March 18, 2017 Author Share Posted March 18, 2017 If the value of the GBP keeps falling the BoE will have to increase interest rates to shore it up (once it breaks through a barrier that might already have been broken.) Interest rates are only going one way, up. Tie it down for a significant period (10 years if you can find it?) would be my advice. It might be more expensive now, but will really benefit you later. Of course, every mortgage and provider has different clauses and that is something you really need to be aware of: Don't sign a mortgage without understanding fully the terms and conditions. A 10 year fixed for me is around £300 per month, where as a 2 year fixed around £270; I think that is the right thing to do. Link to comment Share on other sites More sharing options...
andrejuan Posted March 18, 2017 Share Posted March 18, 2017 OK, I agree that interest rates can only go up from the current all time low. The question is when and by how much. I doubt there will be a large increase within five years. If someone is taking out a mortgage of the maximum amount to earnings, fixed deals takes the worry out of it. A smaller mortgage which won't break you if interest rates increase might be better on the rate of the day? Link to comment Share on other sites More sharing options...
Robbie Loving Posted March 18, 2017 Share Posted March 18, 2017 A 10 year fixed for me is around £300 per month, where as a 2 year fixed around £270; I think that is the right thing to do. If you're taking a relatively small mortgage, which your payment indicates, then a change of interest wouldn't make that much of a difference in your monthly payments. Use a mortgage calculator to see the differences in increases in payments. If you're wanting your payments to be stable, then I wouldn't worry about what is happening or likely to happen in the market, because it matters nothing, because you want your payments to remain stable regardless. Length of the fixed rate of course goes in line with what you expect to happen in your circumstances going forward, if you know your pay is going up each year, you can potentially consider looking for shorter term deals. If you don't feel your pay will increase, then fix for a prolonged period of time and then you know how you're sitting for the future. Link to comment Share on other sites More sharing options...
El Cid Posted March 18, 2017 Author Share Posted March 18, 2017 OK, I agree that interest rates can only go up from the current all time low. The question is when and by how much. I doubt there will be a large increase within five years. I think the chances of a above 5% interest rate within 5 years is 50/50 Prior to 2008 interest rate were above 4% for years on end; could anyone predict the interest rate of below 1% in 2005, in the coming 5 years? The economists struggle to predict interest rates one year ahead, and things are very volatile with Brexit and Trump. Link to comment Share on other sites More sharing options...
andrejuan Posted March 18, 2017 Share Posted March 18, 2017 (edited) I am always a bit cautious on predictions. A year after I took out my first mortgage the rate jumped to 15% I doubt we will see that again but it was tempered by MIRAS a little. 5 years later I think it had dropped to 9% Oh how we sighed I tell you, the youngsters today don't know they are born, I say they don't know they are born :-)))) Edited March 18, 2017 by andrejuan Link to comment Share on other sites More sharing options...
El Cid Posted March 18, 2017 Author Share Posted March 18, 2017 I am always a bit cautious on predictions. A year after I took out my first mortgage the rate jumped to 15% I doubt we will see that again but it was tempered by MIRAS a little. 5 years later I think it had dropped to 9% Oh how we sighed I would class 5-9% as somewhere near normal, so if I can get 3% fixed for 10 years, I think it is cheap Link to comment Share on other sites More sharing options...
andrejuan Posted March 19, 2017 Share Posted March 19, 2017 I would class 5-9% as somewhere near normal, so if I can get 3% fixed for 10 years, I think it is cheap Yep, I would grab that with both hands ! Link to comment Share on other sites More sharing options...
Recommended Posts
Create an account or sign in to comment
You need to be a member in order to leave a comment
Create an account
Sign up for a new account in our community. It's easy!
Register a new accountSign in
Already have an account? Sign in here.
Sign In Now