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    Mortgage advice (again - dull thread alert)

    So, I'm remortgaging because my current fixed deal is running out. Obviously I'll get a broker involved to find the actual mortgage, but I'd be interested in the OTF financial moguls' thoughts on what interest rates are likely to do in the short to medium term. I don't really want to tie myself into any deal for more than three years (because we might move).

    #2
    Mortgage advice (again - dull thread alert)

    I'm hardly a mogul, but our bank client is currently introducing a ten-year fixed rate mortgage at a very good rate. That tells me they don't think rates are going significantly higher in the near- to mid-future.

    Personally, I don't see them going much lower than they are now, and I don't see them going much higher either. I'd explain my thinking, but everyone would start quibbling with my reasoning and I can't be arsed right now. But that's my two cents.

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      #3
      Mortgage advice (again - dull thread alert)

      That's a very reasonable rate.

      Comment


        #4
        Mortgage advice (again - dull thread alert)

        The Horse wrote:
        So, I'm remortgaging because my current fixed deal is running out. Obviously I'll get a broker involved to find the actual mortgage, but I'd be interested in the OTF financial moguls' thoughts on what interest rates are likely to do in the short to medium term. I don't really want to tie myself into any deal for more than three years (because we might move).
        If you stay within the same country, moving might not be an issue. I am pretty certain there was a way that you can ensure that the mortgage can move onto a new house when you move, then combine with any other facility. Maybe a pain, but if the rate suits, it is an option.

        Ten year fixes have become a popular move in most countries, WoM. It is more incentivised by state to bring stable options to people buying. The rate itself will just represent the swap rate.

        I will have a look at the UK curve later today - I am aware where the short rates are, but haven't the slightest idea what any of the useful maturities are doing.

        Comment


          #5
          Mortgage advice (again - dull thread alert)

          That's a very reasonable rate.
          Yeah, but you get what you pay for.

          Comment


            #6
            Mortgage advice (again - dull thread alert)

            How predictable are interest rates? And over what time period? I might be refinancing in the not too distant future, also.

            Comment


              #7
              Mortgage advice (again - dull thread alert)

              This is just my opinion, so take it for whatever you wish: don't think about whether interest rates are going up or down or staying put. Think about getting a rate you're happy with and locking it in for a period that suits a) your needs and b) your need for security / tolerance for uncertainty.

              Historically, and the numbers have been run to prove it, the best thing you can do (from a purely $ and ¢ perspective) is take the 1 year deeply-discounted variable rate and keep renewing it every year. But I don't have the stomach for that kind of uncertainty and potential for fluctuation.

              I like knowing what my rate and payment is going to be for the next three or five years. It may cost me an extra half a percent, but I'll sleep better. Those with cast-iron balls might go for a longer-term variable rate and end up saving a few grand over 5 or 7 years. Or, they might not. To me, mortgage rates are not the place for speculation. Gimme the best rate you've got for a reasonable time-horizon and I'm a happy camper.

              Edit:
              This article references the 'running the numbers' study I mention above.

              Comment


                #8
                Mortgage advice (again - dull thread alert)

                Long-term asset, long-term rate. Makes sense to me.

                Comment


                  #9
                  Mortgage advice (again - dull thread alert)

                  Some bloke on Moneybox the other day said if you're going for fixed, go for no less than a 5 year deal. And I'm pretty sure that, like dglh says, you can transfer your deal onto your new house if you move.

                  Although you might find it cheaper in the current climate to go onto Standard Variable Rate for a few months. That's what I'm doing.

                  Oh and, what WOM said about go for what suits you now rather than try and predict what might happen in the future.

                  Comment


                    #10
                    Mortgage advice (again - dull thread alert)

                    Have you had a look at the "One Account". I dealt with them recently and thought the service (as well as the terms of the mortgage) were great.

                    They were offering about 4% which is effectively a variably rate, however, your mortgage is reduced by whatever is currently in the "current" account part of the mortgage.

                    The base rate willalmost certainly drop to 0.5% next month, it's looking unlikely that inflation will go out of control over the next year or two, so large rate increases seem unliekly.

                    Remember with a fixed mortgage, there is frequently the condition that the mortgage is portable if you move. The One account has that.

                    Comment


                      #11
                      Mortgage advice (again - dull thread alert)

                      After almost a decade of being in the category of "private ownership, supported by a mortgage" it looks increasnigly like I'm soon to move back to the socially less-well-thought-of group of "purchasing housing owned by a public authority".

                      That's if Mr Darling is forced to buy the rest of Lloyds HBOS, and its subsidiary (and my lender and deed holder) Cheltenham and Gloucester, anyway.

                      Comment


                        #12
                        Mortgage advice (again - dull thread alert)

                        What is going to happen to interest rates?

                        Interest rates are going to go through the roof. Not in the next few months , maybe not even until next year. If we get a change of govt and they take the hard decisions then we may avoid the total trashing of sterling and the kind of inflation that causes revolutions that Team GB will certainly deliver.

                        If you think that is a bit OTT then think about what normally happens when govts start the printing presses and look at who is getting humped worst in the current recession. Think about who usually foments the successful coups & revolutions. Once middle-aged middle England works out that they are not going to get a bean back from the govt in their old age, once they suss that they (and most of us) are paying into the biggest Ponzi scheme of them all then they might just question why they should continue to do so.

                        However, thats a bit away. I suspect that the decision has already been taken to inflate our way out of debt. Its probably the only way out given that hard work, saving, joined up economic thinking and properly targeted long term investment seems anathema to our political masters. And to most of the population.

                        So, if you have savings, watch them evaporate. If you have a variable rate mortgage, watch the payments rocket. If you are on a low/fixed income, get used to cat food.

                        Buy gold. And oil. Its going to go up as well.

                        Comment


                          #13
                          Mortgage advice (again - dull thread alert)

                          My tactical prediction is that interest rates will remain low for the duration of the recession for political reasons in the UK.
                          The govenment cannot risk to massive vote loser of people losing thier homes in the run up to the election in the next 18 months so the low interest rates are a form of tax cut for home owners. See also the aggressivenes with which the government have mande sure the banks have passed them on to mortgage holders on tracker and Standard variable rates.
                          I got a tracker which is currently 1.18% and has fallen about £300 a month in the last 8 months.

                          I wouldn't fix for at least 2 years (or the tories come to power).

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