Mortgages: To fix or not to fix?

[TykeMerc]

We've managed to get two reductions now since our original application in Octobet, down 0.2% and saving about £30/month!

Better in your pocket than theirs

I do see that certainty can pay off, if you can get such good rates then it makes a lot of sense.

[eek]

How much is my house worth? Get a Price Comparison Report

https://www.propertypriceadvice.co.uk/

Land Registry Sold House Prices and Property Valuations

https://www.hometrack.com/uk/product...uation-report/

zoopla is wrong but nowhere near as wrong as the first 2 sites listed...

[SueEllen]

zoopla is wrong but nowhere near as wrong as the first 2 sites listed...

To be fair I just went to moneysavingexpert.

When I did my own remortgage they were all sh*t apart from the last site - Zoopla was the worst though. My valuation was basically the same as the last site from 2 providers with different surveyors.

[Freelancer Financials]

Here's a random mortgage question that doesn't deserve its own thread.

When you buy a house and get a mortgage, the LTV is calculated based on how much you want to borrow and how much you are paying*.
When you re-mortgage, after having paid some of the loan back, you want to borrow less so the LTV has changed. But, will they always use the previous value (sale price) in the calculations?
If your house has gone up in value by 20% (according to valuers the lender trusts) since you bought it will you get an even better LTV? Or does the value used for LTV purposes 'stick' until the house actually gets re-sold?

Our 2-year fixed deal is about to end so I'm about to start looking around - as well as monthly payments and overpaying about 10% of the loan, it appears prices have risen here.





*I know they can reject your price reflects the value but let's not go there

The short answer is... They take the latest value of your home to calculate LTV. Irrespective of what Zoopla or any other property valuation site estimates your property to be, the lender will use the valuation provided by their approved valuers. As Ben from Power Mortgages said, most lenders will use an automated index valuation system.

[Freelancer Financials]

Better in your pocket than theirs

I do see that certainty can pay off, if you can get such good rates then it makes a lot of sense.

Everyone including mortgage brokers will have differing opinions. But essentially it's based on your personal circumstances and your risk profile.

Personally, I don't foresee the base rate going up anytime soon and if it does it will be in very small increments. If it was me, I'd be looking at a 5-Year fixed rate mortgage, preferably with offsetting.

There couldn't be a better time to secure a long term fixed rate (5 years or more). But like I said it depends on your personal circumstances.

[d000hg]

Personally, I don't foresee the base rate going up anytime soon and if it does it will be in very small increments. If it was me, I'd be looking at a 5-Year fixed rate mortgage, preferably with offsetting.

If you don't think rates will go up, then why pay a premium to fix? All you are doing with a fixed-price mortgage is paying insurance against rate rises which the banks have obviously factored in, so that they still (normally) end up ahead of the deal.

Why not take a super-cheap variable rate and overpay like hell

[d000hg]

Also, I gather the rules with IFAs changed so they cannot offer their services for free, and work on commission?

At what point would you actually have to pay them - only if they apply for a mortgage on your behalf? I don't want to go running to several IFAs and find they all bill me for their time

Any IFAs here, feel free to PM me touting your contractor mortgage services, as I need to get one sorted out in the next month.

[Lightwave]

If you don't think rates will go up, then why pay a premium to fix? All you are doing with a fixed-price mortgage is paying insurance against rate rises which the banks have obviously factored in, so that they still (normally) end up ahead of the deal.

Why not take a super-cheap variable rate and overpay like hell

Indeed.
Although I'd prefer to offset than overpay, it's my war chest.

Personally I think there is a significant chance that rates will go up significantly within the next 3 to 5 years. Each of us will have a different level of needing to consider that....

[d000hg]

I'm wary of offset - and it requires your warchest to be outside the company already - because I'm sure I ready lenders have the right to tell you when you can or can't take back the offset cash - e.g. if you lose any income and want to take money back out, that's the time they least want to let you!

All the cash we have outside the company is in ISAs - I'm not sure if losing those ISA contributions to offset a mortgage makes sense?

[Lightwave]

I'm wary of offset - and it requires your warchest to be outside the company already - because I'm sure I ready lenders have the right to tell you when you can or can't take back the offset cash - e.g. if you lose any income and want to take money back out, that's the time they least want to let you!

All the cash we have outside the company is in ISAs - I'm not sure if losing those ISA contributions to offset a mortgage makes sense?

Offset means it's in a separate account, like 'everyday savings' or current account.
So you can just take it, no questions asked.
Sounds like you are confusing with a 'flexible' mortgage, where you can re-draw any excess amount you have paid off the balance?
(mine is a flexible offset tracker, but I think they are extinct now?).