Mortgage costs

[Lily]

I guess that was a stupid question really. I think I will have to fix.

The valuation chap has been around (2 hours late FFS) and I have a feeling he won't value it as much as the mortgage advisor did as he said things haven't gone up a lot. If he undervalues it I won't get the mortgage that has been secured for me. So I'm a bit stuck really.

[Topcat]

An interest only mortgage will do exactly as it says, it will cover the interest but not the repayment of the loan and so costs less on a monthly basis but leaves you with more to pay off if you carry on with it until the term ends. Presuming you haven't set up a savings vehicle to cover this.

A repyament mortgage will clear both interest and debt at the same time, which obviously costs more.

[Luna]

Definitely switch to interest only for the time being. If you are going to inherit in the future it's not such a pressure to get things paid off.

[Topcat]

Totally get that and its a good idea.

I was more explaining the difference between the terminologies that were a bit mixed up previously.

[Lily]

Apparently my equity isn't high enough for interest only.

I can't afford a shorter fixed rate either. I am considering going down a tracker rate as when it goes down it goes down. But if interest rates are unlikely to get back to where they were (I had a 2.6% or something) maybe I just accept this is life for the next few years!

[Marth]

I've just cancelled my mortgage offer (my current deal ends the end of April so I recently fixed another).

The rates for the Nationwide have fallen since I got my offer, so I've cancelled it. I have to wait 5 working days before I can fix another one with them which is a bit nail bitey.

[Kenickie]

Fingers crossed for a sudden plummet for you!

[Marth]

Fingers crossed for a sudden plummet for you!

Thank you!

[Roma]

My rate with Nationwide ends at the end of May. I keep checking rates regularly in case they fall more.

I’ve not locked a rate in yet but it’s not a bad idea actually if I can still change my mind if rates fall again by mid-May.

[Lily]

Fingers crossed for you, Marth.

I'm in the same boat Roma - I have locked in one rate and understand that I can swap for another if things dramatically improve. I have decided against a variable one as I need to work on what I can just about afford NOW. Knowing my luck Putin will invade someone else or Truss will come back as PM when I am on a variable, pushing rates even higher. I don't want to lock for 5 years but I don't have any choice. It could be worse.

[Kenickie]

I think you've got to do what's right for you Lily and then once you're locked in never think about the rate. I fixed for 5 years which I've never done before but I couldn't face years of stressing about what the payment would be so it's worth it even if I end up paying a little more overall.

[Bedford Falls]

When we started our mortgage back in 2013 we locked ourselves in for an initial 4 year term, then 5, and we are now, again, locked in for another 5 (which will hopefully be our final term). As Kenickie said above, once you're fixed you dont have to worry about the rate (and with those lot still clinging on to No.10 there is every chance of seeing more turbulence).

[Princess Morripov]

I’ve locked in a rate for end of March with NatWest but didn’t think I could change it once I’d locked in? I might investigate as I think I locked it at the worst possible time in a panic and everything has stabilised a bit since then.

[Marth]

I’ve locked in a rate for end of March with NatWest but didn’t think I could change it once I’d locked in? I might investigate as I think I locked it at the worst possible time in a panic and everything has stabilised a bit since then.

Worth calling them. My offer said I didn't have to accept it and to get in touch if I didn't want to go ahead as long as it was in advance of the start date

[Princess Morripov]

Thanks Marth, I’ll take a look.

[Marth]

I've just switched again at the new lower rate. I cancelled by phone then went back into my online "mortgage manager" to select a new available one.

It says I can cancel this one as well if I want so I have time to keep an eye out for the rates.

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[Princess Morripov]

Thank you so much for this Marth, I've just been able to amend a portion of my Natwest mortgage where the fixed rate is ending 31/03 from 5.89% (which I fixed when the opportunity first arose) to 4.75%. They've said I can keep cancelling and reamending within 3 working days of the 31st March so that is positive.

[Lily]

That's good news both of you!

Thank you for your wise words about the fixed rate. it's definitely the sensible way to go.

My current provider's rates have dropped already so that has given me a bit of hope that things will be more affordable in a month or so. Their monthly repayments would be more affordable than the one the broker is working on, even with a product fee, but she did say she monitors the rates constantly. I'll give her a call tomorrow. Problem is I guess I would have to pay another £295 fee to her for organising it unless I take over myself.

[Lily]

This update may be useful: M.A. fee is non-refundable but she can do all the gubbins with any other applications I make, including if I go with my current provider, so I'm sticking with her. She's keeping an eye on rates too so whatever happens I am going to be a bit better off than I feared.