Mortgage thoughts

[scooterscot]

Yup 5 years or more - the uncertainty would drive us nuts were it our shoes.

All likelihood your LTV will rise as prices correct to norms in the years to come making the longer deal seem all the sweeter.

[WTFH]

...tracker mortgages cost MORE than fixed, suggests banks have little expectation of significant rate rises...

Offset trackers always cost more than fixed, that’s how banks make profit from them. But if you can put a reasonable amount in to them, you earn the same interest.
So if your tracker is a 2% mortgage and an ISA is 1.2%, get a tracker, put the money in there and you earn 2% interest on it.
But it costs you more if you can’t save, or have some blind faith in a miracle happening where ISAs earn 6% and BOE base goes to 0.25%.

When we had a mortgage, I had a spreadsheet to work out how to pay it off quickest. I had (and still have) no idea what the economy will be like in 5 or 10 years, but if you have no debt, you have no debt. At which point, who cares what the interest rate is on your borrowings.
A few years of paying off your debt to become debt free is a good thing, in my book.

[d000hg]

Offset trackers always cost more than fixed, that’s how banks make

are you sure? In the past, I'm sure we've found them cheaper... The bank knows they will not lose out, whereas fixed you are betting rates won't drop and you pay for that. Of course you also get a discount on fixed because you are locked in.



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[d000hg]

Yup 5 years or more - the uncertainty would drive us nuts were it our shoes.

All likelihood your LTV will rise as prices correct to norms in the years to come making the longer deal seem all the sweeter.

That's an interesting point on LTV but we're on the right side of 60%

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[Ploptimus]

Personally. we just started a 2 year fixed just over a year ago. I am currently on a FTC so plan to remortgage to a 5 year once I can so have more options while PAYE. In addition, the mortgage rate cant go much lower but it can certainly go much higher (regardless of how unlikely) so it seems the longer the better on fixed.

[Zigenare]

Why are you asking a bunch of dickheads on a failed geek forum?

Grow a set of balls!

[BlueSharp]

Also remember if you take the 2 year you will have to remortgage twice more compared to the 5 year deal. So include the fees and hassle to do so in your comparison.

[Whorty]

Why are you asking a bunch of dickheads on a failed geek forum?

Grow a set of balls!

Because a lot of us have cleared our mortgages so maybe, just maybe, we have a few ideas on how to become mortgage free whilst earning the good money of a contractor

[Whorty]

I want to build up cash - my portfolio is unbalanced in terms of property and stocks so I'm trying to get more cash in the bank.

This is how our offset worked with Coventry (I'm sure other lenders do something very similar).

You get 2 accounts with them - the mortgage and a savers account. The mortgage is variable and you pay say £500 per month (made up number so depends on your mortgage size). This covers the capital portion and interest per month on say a 20 year mortgage.

Separately you have a saving account with Coventry linked to the mortgage. The balance of the saving account nets with the mortgage each month and you only pay interest on the difference.

May not be for you but worked perfectly for us. The savings account money is available to you when you need it, but whilst it sits in that account it's effectively 'paying off' your mortgage. **

** Edit: and don't forget, if your mortgage interest rate is 4% (for example) your savings are effectively 'earning' 4% income tax free by being offset against your mortgage. With savings rates so poor, that is something worth considering.

[DimPrawn]

I cleared my ex wife's mortgage. She says the feeling of wealth and freedom is exhilarating.

HTH BIDI