BoxHill.co.uk

[Va Va Oops]

Apparently, the Woolwich now link their mortgage offers to the property rather than the person. So, when I changed my mind about which property I was going for I also lost my offer of a 2 year fixed rate and I now have to choose again from their current deals.

I need to let them know asap but thought I'd just see whether there was any sort of consensus of opinion on here (as it is a proven fact that groups make better decisions than individuals).

So - what would you go with?

- 5yrs fixed at 6.99% followed by base rate +0.95% / APR 7.1%

- 10yrs fixed at 6.89% followed by base rate +0.95% / APR 7.3% or

- Variable, base rate +1.79% / APR 7.5%

and why?

[Tango]

Unless I really had to I wouldn't buy, not in the current economic climate.

Recession is just around the corner, then property prices will nose dive.
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[Guy M8]

For your own house then go for what you can afford at the moment. Recessions last only a year or two. Tango is right about property prices, but they are all relative. When they go up they all go up.
I reckon the 5 year fixed. variable is a lottery at the moment. and the difference is not that great.

I would look for consistency in these uncertain times.
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[Va Va Oops]

Thanks ...I'm listening. ....I'm not interupting. (for once!)

[Guppy]

Shop around those rates look high, there are plenty of lenders as long as you have a deposit.

Don't be shy when you find somewhere , its a buyers market be bold and put in a really cheeky offer the worse that can happen is they say no.

As for recession, at the moment I fear its media hyped, but the more they push it the more nervous peeps will get.

House prices have fallen but the only people selling are those that have to, the rest are staying put.

Also note rents have and will continue to rise, your money may as well be paying for your future as opposed to the landlords.

[ninjabob]

Rent at the mo - then take advantage of falling prices in the next 12 months.
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"Those who understand compound interest are destined to collect it.

Those who don't are doomed to pay it."

[Guy M8]

Remember: Unless you own lots of properties and develop them:

Property and especially your house is not in itself a good investment. (But gup is right IMHO in his analysis)
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[Va Va Oops]

I have been renting for a few years now and it is not much cheaper than the 'part-rent-part-buy' (split your risk) option ...plus ...if I get in now, i can buy a larger percentage later when it is harder for other people to get onto the first rung of the ladder...

I just need to make the best possible 'now' mortgage decision ...will rates go up? or down? in the next 5yrs?

[Guy M8]

Yes. Both.
How much? Depends on the state of panic.
I remember in the 80's and 90's when rates were a lot higher. They have been low for a long long time. In 5 years the chances are things will have become more certain. If the rates fall you won't have lost that much. (You won't gain in any case)
In 10 years there is a greater chance of greater fluctuation.
It's not a great rate at the moment so there is a greater chance of it being lower in 10 years, and also the tie in can be expensive.
5 years is still a bet and you could end up in 5 years having to pay a higher base rate (+1.95%), but you may get a deal at that time.....
I am cautious anyway.
Good luck.
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Old & Slower but Cruisin' Happily!
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[Baloo]

Unless you are going to have material equity in the house from the start, buying could be risky.

There is no doubt that the housing market will drop, how much? i do not know, but the potemtial of negative equity and strict lending criteria may not be a wise move.
i do not know what rental yields are at the moment but if they are less than the %ge drop in the housing market, renting is the cheaper option. Pick up a bargain later on.

Further, if you have some equity available, invest safely and use the interest to offset / cover the rent.

Sadly there are no guarantees, the decision must be yours.

[Tango]

[biggus]

Have you looked at other lenders at all?
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www.bigguspicus.co.uk

There are 10 types of people in the world: those who understand Binary and those who don't

There are II types of people in the world: those who understand Roman numerals and those who don't.

98% of all Harleys ever sold are still on the road. The other 2% made it home

[ardee]

I personally wouldn't go for any of those products. Life has a habit of throwing things at you that you don't expect. If you are tied in to 5 or 10 years and the early redemption penalties are high then you will be worse off if you have to move.

See if you can get a fixed rate for 2 or 3 years if possible, or failing that how about a tracker rate that tracks the bank of England rate? I think that bank of england interest rates are unlikely to change much over the next few years BUT lenders have been putting up their own rates anyway so going a standard variable rate could see further increases in your monthly payments.

I would suggest that you go and see an independant financial advisor if you haven't already seen one. You should be able to find one that is free attached to an estate agent. If not I can point you in the direction of one we used in Guildford.
This site might also be helpful:
http://www.whatmortgage.co.uk/apps/bestbuys/mortgages.asp

[The Mouse]

I have always had 5yr fixed rate and then a couple of months before the 5 yrs is up I go shopping to find the next 5 yr deal, to start as soon the first ends.

I like the security of knowing what i am paying each month, irrespective of interest rate rises and falls. Basically i see anything else as a gamble (tracker, base rate) and i'm not prepared to gamble my house.

Interest rate are high at the moment, for example, i'm with the Nationwade and the 5 yr deal i got only a few months back is 1% lower than what you have been quoted by them. Trouble is, is it going to go up further, or is it going to go down again. No-one knows.

In your position I would go for the 5 yr fixed rate. But shop around, there are loads of comparison sites to play with to find a good deal


Have a look at this, there is some very good advice on here http://www.moneysavingexpert.com/mortgages/

[ardee]

I agree with what Mouse is saying but in this case (correct me if I'm wrong) Vava is looking at a flat and people often tend to move on from a flat within less than 5 years. It is also part buy/part rent I believe so you need to investigate very carefully whether you would be liable to pay the redemption penalty if/when you wanted to increase your share of the ownership. That is why in this case I suggested you go for a shorter time period for the fixed rate if at all possible.

[biggus]

JBTFT
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www.bigguspicus.co.uk

There are 10 types of people in the world: those who understand Binary and those who don't

There are II types of people in the world: those who understand Roman numerals and those who don't.

98% of all Harleys ever sold are still on the road. The other 2% made it home

[Guy M8]

Also house prices rsing and falling is only relevant if you intend to buy or sell at that moment.
If you buy a house at 300K and in 6 months it's worth 280K, you haven't lost if you continue living there. You will only lose if you sell. likewise gains in price are not pounds in your poscket, only if you sell.
The value of your house is really only relevant at the time of buying or selling (Or remortgaging/borrowing against it). If it is to be your home then that is what you are buying. My opinion is:
Rents are not going down and absolutely nothing of that rent goes towards your ownership of the bricks and mortar. Each year of a mortgage the amount of the capital you pay off increases as a proportion of your monthly sum ie you are buying more and more bricks and less on interest. Most interest being paid in the first years and very little in the final years. The point of this is that the older the mortgage the less responsive it is to interest rate changes. In real terms it becomes more noticable at around the 10 - 15 year mark.
Over the full term of the mortgage whatever scheme you choose the total amount you pay (capital and interest) changes very little. It will not suit a bank to earn less money on any product. So It's what suits you best.
Renting may represent a saving over a mortgage when looked at as a short term spend. Of course, if you intend to move in the next five years then renting may be an option.
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Old & Slower but Cruisin' Happily!
Biking is like sex...you can do it on you own OK, with someone else is better, but in a big group can be awesome....
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[ninjabob]

Another article you could read:-

http://www.fool.co.uk/news/property-home/2008/07/08/turning-back-the-property-clock.aspx

I really think you are better off renting till the current trend downwards bottoms out - when you do go for a mortgage go for one that allows you to overpay any spare cash you have against the mortgage this will save you fortunes over the long term. Remember to always pay off any debt first - no point in having savings @ 6.5% when your credit card is 16.9%.

Look for a Current Account Mortgage where all your money is working against your debt all of the time this can shorten your Mortgage Term by several years.
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"Those who understand compound interest are destined to collect it.

Those who don't are doomed to pay it."

[The Mouse]

[Tango]

Don't know if they still do them. I have a mortgage discounted by 2% from the building society's standard variable rate.

This also tracks up and down with the bank of england base rate, and is over the full term. With no tie ins.
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[Va Va Oops]

Thanks everyone.

I've gone with the 5yr fixed rate.

I've also gone with the renting for now option ....you see, I am only buying a 25% share in the property - I'll be paying (subsidised) rent on the other 75%. But, with the 25% share comes the exclusive rights to buy a further share any time I like - at the going rate at that time ...so, if prices fall, I could snap up a further share at the lower price (but will check re possible mortgage penalties - I hadn't thought of that)

As for choice of lender... ....have had an independant financial advisor on the case (several, actually - tedious mandatory beurocracy on these government schemes) and he reckoned the only place I might get a slightly better deal would be Kent Reliance (but apparently they are crap to deal with). This is partly because most lenders have pulled out of the shared-ownership market, and also because those that remain are pulling their short-term fixed rate products and their 'no deposit required' products. (I could pay a deposit but don't want to - would rather keep what little cash I have left over from paying off all my debts for things like motorcycles )

At the end of the day, I am convinced by the arguments that it probably makes little difference overall which product I choose but that the shorter term fixed rate gives you piece of mind and easier budget management without too much loss of flexibility.

I wish they'd get on with building it now that I've made my mind up - then I can start fretting over furniture and garden design

[Tusky]

[Va Va Oops]

[Tusky]

[lost again]

put mine on5 yr fixed rate 2and half yrs ago