Omega Owners Forum
Chat Area => General Discussion Area => Topic started by: Field Marshal Dr. Opti on 19 August 2013, 16:05:36
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I'm currently paying 4.49%......SVR.
I've been offered two fixed rates.
3.59% for 3 years .........or 3.75% for five years. The difference is about £11 per month.
Which package would you choose?
Where will interest rates be in three or five years?
I originally thought that the 3 year fixed rate was best, but now I'm not so sure. :-\
My crystal ball is cloudy and unclear. :'(
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The fact that there's not much to choose between the rates speaks volumes about what the lender's projections are. ;) The question is: What rate are you likely to be able to get at the end of a 3 year term?
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Where will interest rates be in three or five years?
I've had a word with Mr Carney. he'll be putting up the base rate by 2% every three months till we get up to 16%, and then he will keep it there for a very long time :D
Oh dear . . . . Opti ? Are you ok ? quick call an ambulance . . . . . .
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The fact that there's not much to choose between the rates speaks volumes about what the lender's projections are. ;) The question is: What rate are you likely to be able to get at the end of a 3 year term?
I'm guessing that the 0.5% we currently enjoy will be just a distant memory. So, base rate around 3%......mortgage rates around 6%........But what do I know. :-\
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Where will interest rates be in three or five years?
I've had a word with Mr Carney. he'll be putting up the base rate by 2% every three months till we get up to 16%, and then he will keep it there for a very long time :D
Oh dear . . . . Opti ? Are you ok ? quick call an ambulance . . . . . .
:o :o :o :o No shit, Rog. ;D ;D........but should this 'nightmare scenario' actually happen, you may well be closer to the truth than you think. :y
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Have you been to an independent advisor with access to the whole market? Unless you are a bad risk, high LTV, poor credit history etc you should be able to do better than those rates.
Steve
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I reckon it will stay low for the next 3 years, last thing the Government or B of E need to do now is inflate interest.
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Carney has already said that barring a dramatic rise in inflation, interest rates will stay low until employment drops to 7% :y
However, there are many external factors that could affect things, such as a civil war in Egypt forcing closure of the Suez Canal, which would cause crude oil prices to rocket and then fuel prices would go up, which in turn would stoke inflation! :-\
So who knows what the future might bring, hopefully it won't be armageddon any time soon though! ;D
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Have you been to an independent advisor with access to the whole market? Unless you are a bad risk, high LTV, poor credit history etc you should be able to do better than those rates.
Steve
I can, down to 2%......but they all come linked to ridiculous 'administration fees' of up to £3,000. Defeats the purpose of looking for a better deal. >:(
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I reckon it will stay low for the next 3 years, last thing the Government or B of E need to do now is inflate interest.
Indeed, and reading into the rates quoted, that's what the lenders think too.
It's worth shopping around, though, as said. I've always found London and Country pretty helpful, but others do exist, etc. http://www.lcplc.co.uk/ (http://www.lcplc.co.uk/)
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Have you been to an independent advisor with access to the whole market? Unless you are a bad risk, high LTV, poor credit history etc you should be able to do better than those rates.
Steve
I can, down to 2%......but they all come linked to ridiculous 'administration fees' of up to £3,000. Defeats the purpose of looking for a better deal. >:(
Always worth looking at the cost to you over the term, though. Admin fees are a conway of keeping the headline figure low, and hiding the true cost of then loan, and bear in mind you're paying that sum up-front - unless they're adding it to the loan amount, in which case you're paying interest on it.
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Have you been to an independent advisor with access to the whole market? Unless you are a bad risk, high LTV, poor credit history etc you should be able to do better than those rates.
Steve
I can, down to 2%......but they all come linked to ridiculous 'administration fees' of up to £3,000. Defeats the purpose of looking for a better deal. >:(
I think there are two question here, what will the rate be in 3 years and what will they be in 5 years? As these are the points where you will have to renew.
The BOE policy is to keep interest rates low for the foreseeable future until unemployment drops below 7% or inflation goes significantly above 5% 2.5%.
At the current 0.5% base rate the song by Yazz sums up interest rates: "The only way is up".
Now the Government will do all it can to provide an economic feel good factor for the election in 2 years time. After that who knows, what will happen to interest rates, but I think if a recovery has taken hold then with all of the QE money sloshing around in the UK and company profits being hammered since 2007, that they will try to restore them which will mean higher inflation. Add in ever rising energy prices, where UK fracking will have had no impact by then, then I think there is going to be inflationary pressures, but as a borrower, inflation is your friend for the capital, but your enemy for interest rates, as they will be under pressure to rise. If the economic growth does not reach launch velocity so growth continues to be very weak, then ZIRP will continue.
At the moment as a result of the US threatening to taper their QE program, their bond prices have dropped which means yields have risen so they have gone from around 1.7% to 2.7% for 10 years bonds. The same has happened in the UK. How long before real market rates affect what the Government does with official rates, who knows?
Whichever you pick, you could use the savings to accelerate the rate you pay back the capital, so after 3 or 5 years, whatever the market rate, you will have £4000-£7000 less capital to pay interest on which will soften the blow whatever the rates are. Thinking about it, the last sentence actually probably helps provide the answer. I know which I would choose, but that is me and it is your decision. :-X
This is of course assuming where you are one of the richest people in the UK on OOF that in 3 or 5 years, you won't just pay off the mortgage balance from a bit of loose change (by your standards) you have lying around. ;) :P ::) ;D ;D ;D
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I reckon it will stay low for the next 3 years, last thing the Government or B of E need to do now is inflate interest.
Indeed, and reading into the rates quoted, that's what the lenders think too.
It's worth shopping around, though, as said. I've always found London and Country pretty helpful, but others do exist, etc. http://www.lcplc.co.uk/[/url]
(http://www.lcplc.co.uk/)
Thanks, Kevin. :y
I shall digest this at some length. :y
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Have you been to an independent advisor with access to the whole market? Unless you are a bad risk, high LTV, poor credit history etc you should be able to do better than those rates.
Steve
I can, down to 2%......but they all come linked to ridiculous 'administration fees' of up to £3,000. Defeats the purpose of looking for a better deal. >:(
I think there are two question here, what will the rate be in 3 years and what will they be in 5 years? As these are the points where you will have to renew.
The BOE policy is to keep interest rates low for the foreseeable future until unemployment drops below 7% or inflation goes significantly above 5% 2.5%.
At the current 0.5% base rate the song by Yazz sums up interest rates: "The only way is up".
Now the Government will do all it can to provide an economic feel good factor for the election in 2 years time. After that who knows, what will happen to interest rates, but I think if a recovery has taken hold then with all of the QE money sloshing around in the UK and company profits being hammered since 2007, that they will try to restore them which will mean higher inflation. Add in ever rising energy prices, where UK fracking will have had no impact by then, then I think there is going to be inflationary pressures, but as a borrower, inflation is your friend for the capital, but your enemy for interest rates, as they will be under pressure to rise. If the economic growth does not reach launch velocity so growth continues to be very weak, then ZIRP will continue.
At the moment as a result of the US threatening to taper their QE program, their bond prices have dropped which means yields have risen so they have gone from around 1.7% to 2.7% for 10 years bonds. The same has happened in the UK. How long before real market rates affect what the Government does with official rates, who knows?
Whichever you pick, you could use the savings to accelerate the rate you pay back the capital, so after 3 or 5 years, whatever the market rate, you will have £4000-£7000 less capital to pay interest on which will soften the blow whatever the rates are. Thinking about it, the last sentence actually probably helps provide the answer. I know which I would choose, but that is me and it is your decision. :-X
This is of course assuming where you are one of the richest people in the UK on OOF that in 3 or 5 years, you won't just pay off the mortgage balance from a bit of loose change (by your standards) you have lying around. ;) :P ::) ;D ;D ;D
Er...not exactly, Mr Rods. ;D
When I think of my financial position words like destitute....impoverished and piss poor spring to mind. ;D ;D
Informed piece as usual. :y :y
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Have you been to an independent advisor with access to the whole market? Unless you are a bad risk, high LTV, poor credit history etc you should be able to do better than those rates.
Steve
I can, down to 2%......but they all come linked to ridiculous 'administration fees' of up to £3,000. Defeats the purpose of looking for a better deal. >:(
Sounds like you have looked and without the details I can't say for sure but you really should be able to find a lower rate without a silly fee. A good advisor will show you the total cost over a term of your choice 3 / 5/ 10 years including fees.
On the original question of what will rates do, fix or not I would not fix at this time - you can get such a good deal on a tracker there seems little point, unless you think rates are going to rocket - which I don't. That is only my opinion though :-)
Steve
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I have refused the wooing of my bank for the last 12 months to enter a fixed deal of around 0.1% higher than my current SVR ::)
My personal opinion, and nothing more than that, is that interest rates will remain low for the next 3-5 years. The 0.5% base rate is unlikely to change in the next 12 months and then the increase will be very, very slow ;)
Just my 2p ;)
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True, but I bet your SVR is lower than what he is paying right now.
Rates are going to stay the same for 3-5 years so I would look at what your rate is likely to be at the end of your fixed term. If ludicrous then look elsewhere. Also if you are looking at moving in 3 or 5 years then that could influence your decision.
Personally if the SVR you go on to after your fixed rate is palatable I would shoot for the 5 year. The reason being is that if rates go up in 3.5-4 years then you could pay significantly more for those 2 years (between the 3 and 5 year options) if they don't you have not paid that much more. Even then I bet the 5 year fixed rate at the moment (with interest rates at 0.5%) is much less than the current SVR for the proposed loan.
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I'm currently paying 4.49%......SVR.
I've been offered two fixed rates.
3.59% for 3 years .........or 3.75% for five years. The difference is about £11 per month.
Which package would you choose?
Where will interest rates be in three or five years?
I originally thought that the 3 year fixed rate was best, but now I'm not so sure. :-\
My crystal ball is cloudy and unclear. :'(
We have just agree a mortgage at 2.99% FIXED for 5 years. Up to 70% loan to value.
But we have put it on hold as we expect cheaper products "may" come out given recent announcements. We have a few months on our current rate.
But generally, as mortgage rates are cheapest they've been for 14(?) years, I'd look to fix as long as possible. But not at the figures you quoted, they're doing you no favours there.
Given mine and your figures, I'd be looking around. As said before, by me and others, SPEAK TO AN IFA!
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Is it possible to fix for 15 years? And at what cost :-\
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Is it possible to fix for 15 years? And at what cost :-\
The lender would load the term higher, given current situation. But that's the gamble we're all taking.
IMO the the Governors comments are a little ambiguous, as unemployment figures are so easy to manipulate.
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From Optis point of view, he should be able to get a longer term at that rate. Or a cheaper rate for the same term. If you see what I mean.
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That all makes sense :y
Bit of a mind fudge trying to get my head around the whole system/process :-[
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If 2.99 is currently deemed a good fix then I'm willing to stay on my 3.49 SVR with the ability to vary payments.
That said, I also don't have much choice at present as my business hasn't been trading long enough to be paying me a sensible wage ;)
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Who would be self employed ::)
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Er...not exactly, Mr Rods. ;D
When I think of my financial position words like destitute....impoverished and piss poor spring to mind. ;D ;D
Informed piece as usual. :y :y
Lincolnshire is where all the rich folk live :P :P ::)
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Think you might be confusing Lincoln with Lundun ;D
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If 2.99 is currently deemed a good fix then I'm willing to stay on my 3.49 SVR with the ability to vary payments.
That said, I also don't have much choice at present as my business hasn't been trading long enough to be paying me a sensible wage ;)
With the rate we have, an over payment of 10% is possible, it depends on the mortgage you have, not what "bloke says down the pub" which seems to be an issue on here these days.
To all...
Seek advice, specific to YOUR POSITION, not someone else's. :)
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If 2.99 is currently deemed a good fix then I'm willing to stay on my 3.49 SVR with the ability to vary payments.
That said, I also don't have much choice at present as my business hasn't been trading long enough to be paying me a sensible wage ;)
With the rate we have, an over payment of 10% is possible, it depends on the mortgage you have, not what "bloke says down the pub" which seems to be an issue on here these days.
To all...
Seek advice, specific to YOUR POSITION, not someone else's. :)
Absolutely and, as I said, part of my decision is also because of my employment status ;)
Knowing you and Mrs Gixer as well as I do I know full well that your decision is a well informed one :y
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I have just been reading in one of the financial newsletter that I receive. Since the BOE forward guidance of at least 3 years before interest rates rise, Interbank rates that mortgage interest rates are based on have been rising from 0.68% to 0.79% for 2 year swaps and 1.37% to 1.66% for 5 year swaps which suggest that the markets think interest rates will increase faster than the forward guidance suggest with at least 1 increase priced into these rates.
So it would be better to sort that fixed mortgage sooner rather than later as the Interbank rises will affect the rates of mortgages on offer.
Mr Opti, don't get caught, so you have to make some difficult financial decisions like cutting down the household staff from your butler, cook, gardener and chambermaid, having to use of your executive jet less often or even mothballing your 200m super-yacht to save the odd £1m here or there. ;) :P ;D ;D ;D
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I don't think the mortgage is on Opti Towers Rods, rumour has it that there is a Dove cote in the grounds which was mortgaged to gain tax relief back in the day! :)
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He's already been moaning that his lawn mower is burning too much juice. Clearly needs to downsize. ::)
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I have just been reading in one of the financial newsletter that I receive. Since the BOE forward guidance of at least 3 years before interest rates rise, Interbank rates that mortgage interest rates are based on have been rising from 0.68% to 0.79% for 2 year swaps and 1.37% to 1.66% for 5 year swaps which suggest that the markets think interest rates will increase faster than the forward guidance suggest with at least 1 increase priced into these rates.
So it would be better to sort that fixed mortgage sooner rather than later as the Interbank rises will affect the rates of mortgages on offer.
Mr Opti, don't get caught, so you have to make some difficult financial decisions like cutting down the household staff from your butler, cook, gardener and chambermaid, having to use of your executive jet less often or even mothballing your 200m super-yacht to save the odd £1m here or there. ;) :P ;D ;D ;D
That's just not true. My yacht is barely 50 metres in length. ::) ::) :)
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I don't think the mortgage is on Opti Towers Rods, rumour has it that there is a Dove cote in the grounds which was mortgaged to gain tax relief back in the day! :)
I've heard that is the codename for his gold vault. he got the mortgage to save selling any of his gold. Some say the vault is the size of a double garage while others that is is bigger than Fort Knox and packed full of gold and treasure. ;D ;D ;D ;D
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I don't think the mortgage is on Opti Towers Rods, rumour has it that there is a Dove cote in the grounds which was mortgaged to gain tax relief back in the day! :)
I've heard that is the codename for his gold vault. he got the mortgage to save selling any of his gold. Some say the vault is the size of a double garage while others that is is bigger than Fort Knox and packed full of gold and treasure. ;D ;D ;D ;D
I must be a tight bastard. All this money and I drive around in a ten year old Omega worth about the same as a bag of boiled sweets. ;D
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I don't think the mortgage is on Opti Towers Rods, rumour has it that there is a Dove cote in the grounds which was mortgaged to gain tax relief back in the day! :)
I've heard that is the codename for his gold vault. he got the mortgage to save selling any of his gold. Some say the vault is the size of a double garage while others that is is bigger than Fort Knox and packed full of gold and treasure. ;D ;D ;D ;D
I must be a tight bastard. All this money and I drive around in a ten year old Omega worth about the same as a bag of boiled sweets. ;D
Nout wrong there Opti. The omega savings pay for the mention, I bet. ;)
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I don't think the mortgage is on Opti Towers Rods, rumour has it that there is a Dove cote in the grounds which was mortgaged to gain tax relief back in the day! :)
I've heard that is the codename for his gold vault. he got the mortgage to save selling any of his gold. Some say the vault is the size of a double garage while others that is is bigger than Fort Knox and packed full of gold and treasure. ;D ;D ;D ;D
I must be a tight bastard. All this money and I drive around in a ten year old Omega worth about the same as a bag of boiled sweets. ;D
When I was a youngster, my Dad used to do some work for a millionaire who dressed like a tramp and drove round in a rusty Triumph Herald. ;) This guy stored 4 cars in a barn on Dad's farm for a while, 3 Jensen Interceptors and a Rover P5 Coupe! 8)
I wonder what Mr Opti has tucked away in his barn??? ::) ;D
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I don't think the mortgage is on Opti Towers Rods, rumour has it that there is a Dove cote in the grounds which was mortgaged to gain tax relief back in the day! :)
I've heard that is the codename for his gold vault. he got the mortgage to save selling any of his gold. Some say the vault is the size of a double garage while others that is is bigger than Fort Knox and packed full of gold and treasure. ;D ;D ;D ;D
I must be a tight bastard. All this money and I drive around in a ten year old Omega worth about the same as a bag of boiled sweets. ;D
Nout wrong there Opti. The omega savings pay for the mention, I bet. ;)
Or even the Mansion (ffs ;D)