Help! I need a mortgage

Given the chumps in downing street are doubling down on all the stuff that caused the rise last week you should fix now and as low and long as you can get. If the pound drops again you could be looking ato an additional 1% on top of what you're looking at now.

....Usual caveats apply....

Do I need to get started now?

Errr - yes! Even before this shit you should have been looking months ago.

Go to landc.com and tbmc, ask them for reccomendations, then see if those lenders they recommend will allow direct application and go that way, quickest method in my experience.

Is it worth getting an offer now that lasts for a few months then going on the variable rate of your current loan to see how the next couple of months pan out?

Extend the term as long as possible.
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I don't know your figures but say the 18yrs is £700/month and 30yrs is £500/month.
If you go for the 30 you only have to pay the £500 but nothing to stop you paying the £700 assuming you can make overpayment, but the benefit is that you can cut your monthly outgoings by £200 whenever you like, who knows whats going to happen in the next couple.of years.
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As for how long to fix who knows. I suspect along as possible, even now rates are at what anyone who hadn't seen the last ten years would describe as very low, the last decade might well have been the anomaly

First step, find a decent broker in your area. You need his/her skills more than ever. Your LTV isn't too bad.

Fixes are hard to find because of the uncertainty of the market. Lenders are unable to price accurately against rates, hence so many products being withdrawn. It could be that the fixes still out there are likely a bit overpriced (otherwise they would have been pulled).

When your fix ends, obviously you'll drop onto SVR, which, in the very short term, isn't a complete disaster. Within the next couple of weeks, fix products will start to be reintroduced by lenders. So it might be worth holding your nerve to see if something a bit better becomes available.

But a broker will be talking to the lenders almost daily, will know what is coming down the track, not just what's on the website today, and may offer completely different advice.

 I need to find a new one before the end of October.

Start two months ago!! I'd call your current lender and see if they'll let you extend your current deal.

I'm in the same boat (November)
We've been watching for months and desperately wanted to refix in spring, but couldn't without a penalty. Then as the window opened it all went to shit.
Luckily we've got enough sat in our offset that means we pay negligible interest anyway.

Note that when I looked yesterday the 10 year fixed was coming in cheaper rate than the 5 year fixed. Which is the opposite of what we've had in recent history. My read of that is that they expect the current increase to be " temporary" . But bear in mind that temporary in this case may mean 7 years or so.

I just secured mortgage yesterday rates are only being withdrawn for a day or few days at most them coming back more expensive, the rate I secured was only available for 2 days Bunch of crooks.

You can tell them you're going to retire at say 70, and they don't hold you to it. Then you can do what andrewh says.

Is it worth getting an offer now that lasts for a few months then going on the variable rate of your current loan to see how the next couple of months pan out?

We're in a similar situation, we are on a (currently quite reasonable) tracker to keep our options open while we try to move house and have the prospect of it jumping massively to worry about.

I spoke with our mortgage advisor who has suggested applying for a fixed rate mortgage with a different lender (i.e. a remortgage) and then not taking up the offer right away, basically giving us the option of a 5 year fixed rate of 3.91% if we decided we want it at some point in the next 6 months.

His reasoning is that rates could jump but depending on other factors (e.g. energy crisis recession) the bank of england could end up forced to cut rates again. This way gives us a safety blanket for a while and lets us see how things unfold.

Errr – yes! Even before this shit you should have been looking months ago.

Not helpful, but this advice to anyone else reading it! Ours expires at the end of October too but we had the next one signed for on the 1st August (the day before the rates went up but they were already pried in anyway).

Note that when I looked yesterday the 10 year fixed was coming in cheaper rate than the 5 year fixed. Which is the opposite of what we’ve had in recent history. My read of that is that they expect the current increase to be ” temporary” . But bear in mind that temporary in this case may mean 7 years or so.

That's my read of it too. Although I wonder how much of it is priced by the bank, and how much is just down to them acting like a bookmaker and adjusting their rates/products to maintain a balance between variable and fixed rates. So when things look crap they have a run on fixed rates so put those rates up to keep their books 50/50 (or whatever split they think is safe, or matches the rate they can get their own lending at).

I don’t know your figures but say the 18yrs is £700/month and 30yrs is £500/month.
If you go for the 30 you only have to pay the £500 but nothing to stop you paying the £700 assuming you can make overpayment, but the benefit is that you can cut your monthly outgoings by £200 whenever you like, who knows whats going to happen in the next couple.of years.

I think it's about double that, but bear in mind that while say 4% to 6% sounds scary, in reality it's £1200 going upto £1400 for you I think. So it's a jump, but a potentially manageable one.

If overpaying, keep an eye on savings rates too, I can now get more interest in a fixed savings account timed for when the mortgage is next due for renewal than the new mortgage rate. So if you do fix, and things do get even worse , the savings rates might go up too.

Bunch of crooks

Lenders have no control over bank base rates or the current uncertainty in the market. They are withdrawing deals because they could potentially lose vast sums of money if they allow customers to fix too low. Which would be the kind of reckless behaviour that led to the 2008 crash.

There's only one bunch of crooks here, and they've deliberately crashed the markets to enrich their mates at your expense.

As above see a broker and don’t delay. SWAP rates on 2 and 5 year fixed ( what drives fixed mortgage rates) climbed massively in last week so market is pricing in further base rate rises. Fewer deals at the moment as lenders nervous over funding. Expect to pay at least 6% on a fixed as of today, best of luck you get sorted

Although I wonder how much of it is priced by the bank, and how much is just down to them acting like a bookmaker and adjusting their rates/products to maintain a balance between variable and fixed rates.

the bank you buy your mortgage from isn't gambling at all, but the market is. They will just bundle a load of mortgages like yours up and sell them (probably to a pension scheme) at the LIBOR/SONIA rate that the market is charging for 5 years. They will make a (small) margin on top to deal with paying for paperwork and the risk of you defaulting, but the rest is all the market rate. If the 5 year libor swap is 4%, you won't get deals from anyone for less than that. The BOE rate helps steer the libor rate, but is basically irrelevent beyond that.

The 5 year SONIA rate is 4.8% - down a little bit from yesterday, so it may still be settling. a month ago it was 3.2% and a year ago it was 0.7%.

nothing useful to add other than I feel sorry for you guys having to go through this right now

@ OP - useless information now, but as of 3 months before the end of a fixed you can usually get a new deal with the same lender, or get out and into a new deal without penalty.

I'm a) glad we did this ahead of our September re-mortgage timing and b) gutted we didn't fix for longer this time round (went for 3, should have gone for 5 at least).

As for 5 years being more expensive than 10, it's all a gamble as no one knows what exactly will happen next, the biggest factor I can see is that under this government and perhaps for the next 10 years under any government strength and stability are gone!

in reality it’s £1200 going upto £1400 for you I think

There's a good few headlines around with huge jumps - 40%, 60% or doubling. I'm assuming these people are interest only, and for some reason a bit of a risky lend. So going from maybe 2-3% to 6-10%....?

Got a new deal with Barclays sorted in about 3 days, most of that just waiting for a slot for the telephone discussion to confirm all your online submissions
7 year fixed

Had a meeting with a financial advisor a few days after who said it was the right choice to fix for as long as possible
Not sure if Barclays have since withdrawn the rate

There’s a good few headlines around with huge jumps – 40%, 60% or doubling. I’m assuming these people are interest only,

Yes, that's the only way I can see such large multiples being possible.

not helpful but in a similar position. House extension on the horizon so was planning on extending borrowing.

choices are keep existing discount tracker (Base + 0.84%) on half and and fixed at 6% on the other half or fix the whole thing at 5.5%

scary when people say interest rates may increase to 6% base within a year, but fixing at such a high number seems silly given it might all settle down within a year.

banks like the rest of us have no idea what's going to happen as all of their previous data and trends are worthless given the current situations

the bank you buy your mortgage from isn’t gambling at all, but the market is. They will just bundle a load of mortgages like yours up and sell them (probably to a pension scheme) at the LIBOR/SONIA rate that the market is charging for 5 years. They will make a (small) margin on top to deal with paying for paperwork and the risk of you defaulting, but the rest is all the market rate. If the 5 year libor swap is 4%, you won’t get deals from anyone for less than that. The BOE rate helps steer the libor rate, but is basically irrelevent beyond that.

The 5 year SONIA rate is 4.8% – down a little bit from yesterday, so it may still be settling. a month ago it was 3.2% and a year ago it was 0.7%.

But on the larger scale, if the lender* sold too many of a product, and then tried to sell them onto the financial markets that would drive their value down (the rates up)?

*at least a big one with enough volume to influence the price.

But on the larger scale, if the lender* sold too many of a product, and then tried to sell them onto the financial markets that would drive their value down (the rates up)?

*at least a big one with enough volume to influence the price.

yes to an extent, but at the moment those shifts (number of products sold next week) are generally glacial in pace and very controllable by the lending institution. If they find they've got too many agreements in principle out than they're comfortable with (and I suspect they would start hedging the interest rate as soon as the AIP is issued) then they will just tighten their lending rules until the situation unwinds itself. Nearly all of the time a person getting a new mortgage is also cancelling an old mortgage, so the net amount of borrowing moves pretty slowly

I’m so bloody glad I paid off my mortgage a couple of years ago! Not that it was particularly big, but still…

To bring this one back to life.. our timing sucked too so we bit the bullet and decided to get a rate 'locked in' even though we'll have to buy out of our current fix. My question is, how 'locked in' is 'locked in'? Ie. we have the offer, we've gone through the legals and can stump up the arrangement fee however the offer is valid until the end of March.
Our mortgage broker is advising that there is no risk so we should set the completion sometime in mid march to give a little buffer and the lender will honor the deal. I'm however nervous.
It's all a bit inverted from my norm, I've only bought and switched whilst rates have been low and going down. This time we're wanting to keep our current rate for as long as possible and then the new mortgage is damage limitation.

Our fixed rate is due up in March and our broker called out of the blue earlier this week with a 5% 5 year fixed deal with Halifax (we're 2.85% with Santander at the moment).
We've secured it for now as that then gives us 6 months to shop around and see what happens to the market. Broker said there are no obligations so we can continue to seek and secure better deals until we need to finally jump to a new lender.

we bit the bullet and decided to get a rate ‘locked in’ even though we’ll have to buy out of our current fix.

Nice, worst* of both worlds 😟

I wouldn't ( read amn't) fix just now.
* maybe

We have a year left on our 5 year fix, currently at 1.88%. I was speaking to a pensions guy last week, ex-city banker, who agreed it’s a mess out there but said I needn’t worry too much just yet as things might have settled down by this time next year. He reckoned BoE rates would probably be at about 4% by then (down from 6%), but of course no-one has a crystal ball.

I am absolutely not a financial whizz, but if you have the option of riding out the next 6 months on a lower rate with a fix already agreed I’d do that. Personally, we will try to top up the war chest over the next year with a view to bringing the principal down as much as possible when we need to remortgage, which should reduce the shock of higher interest rates.

Nice, worst* of both worlds 😟

I wouldn’t ( read amn’t) fix just now.
* maybe

Yeah I know what you mean but we luckily managed to get in before it went properly crazy and I'm willing to bet (literally) that it'll still be high when our current fix finishes in July '23. My gut feeling is that it'll take a good few of years to get back down below 4% but like everyone else I could well be wrong. The buy out isn't crazy and will easily be offset by the cost of a few months at 6%+, that was enough for me.

I was speaking to a pensions guy last week, ex-city banker, who agreed it’s a mess out there but said I needn’t worry too much just yet as things might have settled down by this time next year. He reckoned BoE rates would probably be at about 4% by then (down from 6%), but of course no-one has a crystal ball.

Base rates are currently 2.25%, they were projected to rise to 4ish by June/July 2023, but the market is now expecting 5.5% by then. This is already baked into fixes being offered now, so it's unlikely there is any advantage to remortgaging early at this point.

'Settling down'? You'd hope that the markets would be slightly less volatile at that point, but we've got the OBR reports and Kwasi Mk2 in November to get past first.