john banks

Looking for a fixed rate mortgage. Best I found was 5.09% Nationwide over 10 years. My accountant recommended a mortgage broker whom he said was free, but they want to charge a fee on completion (as well as their kickback from the lender of £1050 LOL) if I do it through them. They sent me quotes and the best they came up with was the one I'd already found and told them about at the outset, so not really justifying their fee

Anyone know of a better 10 year fix than 5.09%?

I know rates may go down, but if they triple (and no one knows), affordability could be an issue as we are borrowing 3x joint income (which is my own sensible threshold despite lender willingness to go silly) on 60% loan to value. The pundits faith in the long term rates being low suits me fine, I think they are complacent as you never know what will happen. Redemption penaties are reducing and reasonable to my mind.

I'm in a GP partnership and by default will be there for 34 years yet

Flatcapdriver

This looks good value on the face of it but what redemption penalties are involved? From a budgeting point of view, I can understand the attraction but what happens if we were to join the €uro in that time and you could benefit from lower interest rates?

paulr

I cant see interest rates trippling.

KJD Mk1

iTrader: (3)

If interest rates tripple the country will be on its knees, does sound like a good deal though, at least you will have piece of mind but check the small print for tie in`s etc.

john banks

5% of the outstanding loan in year 1, reducing by 0.5% per year until year 10. At worst if we didn't fix, rates tripled, contraceptives failed and the roof needed renewing I would need to work quite hard to keep up

You can overpay by £500 per month penalty free though during that time which is quite attractive.

Boost II

iTrader: (1)

Some of the analysts are saying the longer term fixed rates are looking a little expensive at the moment. Better to get a 2 year fix at 4.5 ish whilst waiting for the lenders to reduce the longer term deals over the coming year or two.

Still, nobody knows as you say and the 5.09 looks OK compared to the average for that time frame of fix. If you can afford it now, then your salary is only going to go up over 10 years hopefully - so what if rates come down and you are paying a little over the odds, it won't be much and you'll have the house you wanted.

Like all things financial it comes down to your attitude to risk - there are no cast iron right moves.

Just my thoughts by the way, not an expert or anything.

Buckrogers

Don't know if these are any good:
http://www.moneyextra.co.uk/

Tentenths

John,

Funnily enough I've just been researching 10 year fixed deals for a client I'm seeing tomorrow. You'll be pleased to know that you can stop looking now because you've already found about the best! No 2 is the Derbyshire @ 5.10% but their variable rate (which you'll pay at the end of the fixed period) is currently 6.75% compared to Nationwide's 5.99%.

10 year fixeds won't suit everyone. If you want the peace of mind of knowing exactly what your mortgage payments will be for the next 10 years they're great - provided the rate stacks up. With current variable rates being, typically, 6.50 to 6.90%, a 5.09% fixed rate gives you a reasonable margin even if rates fall.

Yes, 10 year fixed rates have been a little lower in the past, but not that much. I remortgaged in the summer of 2003 when 10 year rates "bottomed" - 4.59% for 10 years. So 5.09% is still very attractive - particularly if you want to buy the house now rather than a year ago/in a year's time!

HTH

mart360

We have a 5.65% 10 year fixed, taken out about 3 years ago.

the redemption fee was very high, approx 30% however it only lasts for 5 years, then we are free to move,

admittedly its slightly higher than some of the attractive 2 year rates, but we know that for the next 10 years what our monthly payment would be.

ours was through a broker, and birmingham midshires was the lender, incedentaly we did a remortage after 2 years, and the remortgage portion was also at 5.65% for 10 years..


Mart

RRH

Theres more chance of rates going up by 5% than there is of them coming down by 5%, so in my simplistic view the potential savings outweight the risks of the base rate falling slightly.

having said that I have no idea whatsoever how I passed my economics degree with such a lack of attention to detail

scoobyjimbo

[QUOTE=Boost II]Some of the analysts are saying the longer term fixed rates are looking a little expensive at the moment. Better to get a 2 year fix at 4.5 ish whilst waiting for the lenders to reduce the longer term deals over the coming year or two.

I agree - the longer term fixed deals are not that atractive IMHO.. I would go for a 3/5 year fixed deal myself and assess then.. I also dont think the rates will trebble.. anyway i can actually see them dropping a bit before maybe increasing in 2006. So with this in mind it might be worth waiting as you no doubt will get a better deal then.. Ofcourse this is my opinion...
J

davyboy

I would be looking at penaties at getting out of a 10 year mortgage!

Tentenths

Good point - but see JB's post No.5

Diesel

Portability is the key John - make sure you can take the mortgage over to any other property for a reasonable fee. You never know what's around the corner!

Tentenths

Yes, you can.