Reply to: Mortgage

[Moscow Mule]

If one would be looking for a 60% mortgage, fixed or tracker?

Best offset rate you can get.

I'd put up with a tracker for a good offset deal.

[Fred Bloggs]

What LTV % was that?

Are you sure it wasn't a shorter fixed deal. I know for a fact the 95% LTV rate was 5.55 to 5.95 (apr>7%)

About 40% LTV.

[Bagpuss]

I can assure you it is true.

What LTV % was that?

Are you sure it wasn't a shorter fixed deal. I know for a fact the 95% LTV rate was 5.55 to 5.95 (apr>7%)

[expat]

If you think you know what the future hold and want to bet on it, choose accordingly.

If not, choose a fixed rate if stability is more important to you than best price; otherwise choose variable.

It's like insurance: insure against the events that you can't afford to cover; just pay up for the smaller events. Same principle: the average rate is worse for better cover, because the company that covers you is taking a profit out of it.

[pzz76077]

Whatever you go for, aim to pay it off as soon as is humanly possible, then get on with your life and not have to worry about paying the mortgage.

PZZ

[DimPrawn]

Yes, you should always go for a variable rate when rates are at their lowest they've ever been and can only go up :-)

If rates are so low now, get flexible and pay off your debt.

Then sit back and laugh when you watch the fixed raters come off their "deals" when you have no mortgage.

[bobhope]

I would say fixed, if nothing else at least you have certainty over the repayment amounts.

I am always one to have the "worst case scenario" at the back of my mind (which is probably why I might not achieve as much out of life as if I were more gung-ho, never mind).

It is easy to forget in the current low interest rate environment that the Bank of England rate (in those days set by the treasury) was 13% in November 1988, was up to 15% by October 1989. It stayed that way for one year and didn't go below 10% until the second half of 1992.

http://www.bankofengland.co.uk/stati...s/baserate.pdf (SFW)

What is going to happen in the future? The main questions to consider are:

Is inflation dead or merely sleeping?

If it is merely sleeping, how dedicated to fighting it will the Bank of England be when it wakes up?

It would appear to me that despite inflation being the BofE's one supposed consideration when setting interest rates, that has in fact been a secondary consideration over the past nine months or so.

Then again, even if rates do eventually skyrocket - you might have paid off the mortgage by then in which case it wouldn't matter.

nine years more like. "We don't target asset prices" - of course not.

[bobhope]

Absolutely.

Permies fix. They have a steady income and need to know they have steady outgoings.

Contractors get an offset/flexible mortgage. When the going is good and they are on endless £800/day contracts they pay into the mortgage agressively.

When times are tight, they stop paying or pay the minimum.

Simples.

Yes, you should always go for a variable rate when rates are at their lowest they've ever been and can only go up :-)

[DimPrawn]

The 'experts' told me to fix when I made my last mortgage early 2008. Interest rates were going to "go through the roof" apparently. I ignored them and got a tracker and now I'm paying 1.19%.

Permies fix because they need to have "stability" and the need to "know their outgoings". Contractors can chance things and so they should. Go for a tracker.

Absolutely.

Permies fix. They have a steady income and need to know they have steady outgoings.

Contractors get an offset/flexible mortgage. When the going is good and they are on endless £800/day contracts they pay into the mortgage agressively.

When times are tight, they stop paying or pay the minimum.

Simples.

[Fred Bloggs]

That doesn't make sense, the Britiania's fixed rate 10 years ago was circa 5.55% (with a much higher APR of around 7%). The BOE base rate was 6%.

I can assure you it is true.

[Lockhouse]

The 'experts' told me to fix when I made my last mortgage early 2008. Interest rates were going to "go through the roof" apparently. I ignored them and got a tracker and now I'm paying 1.19%.

Permies fix because they need to have "stability" and the need to "know their outgoings". Contractors can chance things and so they should. Go for a tracker.

18 months ago my 2 year tie-in period with The Halifax ended so I went with the HSBC "Mortgage Matcher" deal available at the time. I'm currently paying 0.63 above base (yes really) with no tie-ins or repayment penalties.

[swamp]

The 'experts' told me to fix when I made my last mortgage early 2008. Interest rates were going to "go through the roof" apparently. I ignored them and got a tracker and now I'm paying 1.19%.

Permies fix because they need to have "stability" and the need to "know their outgoings". Contractors can chance things and so they should. Go for a tracker.

[Bagpuss]

We fixed @ 4.54% with Britannia for 10 years and it ended in January 2009. I think that 4.5% is a pretty good bet over the longer term, I reckon you'll come out on top with that and in the meantime you'll know exactly how much you'll be paying.

That doesn't make sense, the Britiania's fixed rate 10 years ago was circa 5.55% (with a much higher APR of around 7%). The BOE base rate was 6%.

[Fred Bloggs]

We fixed @ 4.54% with Britannia for 10 years and it ended in January 2009. I think that 4.5% is a pretty good bet over the longer term, I reckon you'll come out on top with that and in the meantime you'll know exactly how much you'll be paying.

[minestrone]

Looks like you can get 5 year fixed rate mortgages at about 4.5 from a very quick search, halifax and post office. Max 60% LTV rate which is ideal.

I can also see interest rates going through the roof in 2 years so a 5 year would be ideal.