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First mortgage, current economic climate, fixed rate or variable?
I'd go for a 10-year fix if you've got fairly guaranteed employment. They're ridiculously low at the moment and mean a major part of your outgoings are predictable - really helpful when young. Also, the only way interest rates can go is up and if the economy does tank when we leave the EU then this is likely to happenOriginally Posted by TH63
You need proper advice as it is not as simple as providing an opinion based on the limited information provided. A key thing to consider is if you plump for a variable rate then how affordable the mortgage will be if the rate increases, if there are lifestyle changes etc. etc. My advice is to sit down with a qualified mortgage adviser & go through all eventualities in detail.
Thanks for the advice. It's not for me but a family member, the offer is 5 year fixed, I'm thinking is it worth betting on interest rates staying low then looking at changing mortgages after five years?
Will definitely get a mortgage advisor to go through the options though.
I just took a 5 year fixed. It's a bit more expensive than variable at the moment but, in 5 years time I reckon I'll struggle to find anything as low in interest rates.
Some things to consider - can your family member lower the term of the mortgage? Can they offer a bit more deposit (you get a better rate if the LTV hits 85%, 80% etc).
One positive with fixed rates is that you know what you'll be paying every month. One negative (as I am currently finding), is that you pay a bit extra at the start.
Who knows where interest rates will be in five years time - if we hit high inflation and the pound is taking a hammering - then maybe they'll have to go up to bring in foreign investment.
In this current climate there's big difference between a 5 and 10 year fix. It's hard to imagine any crazy spike in five years. Brexit has meant we should have a prolonged period of low rates. Personally, if I had the chance for a 10 year fixed repayment mortgage, I would go for it for the sake of insurance. 5 year is a totally different consideration.
Try and get good advice from someone who is neither a broker or a banker. And not me either.
I would go for a 3 year fixed. Rates should still be low in 3 years with brexit happening. And then go for 5 year. You should have a better LTV ratio by then so that will lower the rates.
Went for a remortgage last year3 year deal for similar reasons, brexit has pushed back any rate rises another couple of years now though.
What's the crack with moving house if you currently have a fixed rate
Normally (but not always) you can transfer it to the new property, known as 'porting'. Worth checking your original offer letter to see if you can 'port' your mortgage & speaking to your lender to see what you need to do
i have just remorgaged on a fixed term and i can transfer it if i move. but they will want to do the checks all over again like a survey and stuff to make sure you are still within the LTV thing. more solicitor fees basically.
Some great advice there for which I am very grateful. Thanks all.
Be careful fixing for 10 years if you aren't intending to live there for that long, yes you can often port your mortgage but will be stuck with the same provider
Get a decent 5 year fix
Use comparison websites
Keep an eye on your LTV
If you have half a clue what you're doing I wouldn't bother with a mortgage broker
If you know your own finances and understand interest rates and LTV then go it alone
all of this but if you are self employed then you will need a specialist broker who has access to the underwriters. the high street banks just dont have a clue about the self employed.
Too true, I had this problem, confused even more by just going to Limited Co (you need 3 years accounts). Added with the fact we had to keep my partners flat as it was in negative equity this meant only 2 providers would give us a mortgage. Thankfully we got a mortgage before the new affordability tests came in, otherwise we couldn't have got a mortgage.
Shows how out of touch I am - I had to google "LTV".
Thankfully, managed to pay off my own mortgage last year, interest rates were around 15% when we first had it!
Hopefully we never see that again. I grew up in those times. You should make sure your family member can afford a rate rise of 2-3%.Shows how out of touch I am - I had to google "LTV".
Thankfully, managed to pay off my own mortgage last year, interest rates were around 15% when we first had it!
All good mortgages being cheep, and although they wont be allowed to go as high as the 80's they can still go relatively alot higher.
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