After 30 April 2023, Newcastle Building Society's Standard Variable Rate, currently 3.96%, will apply for the remaining term of the loan.
yep, you move onto variable rate so you're in for a big jump unless they get things under controlJust double checked how long mine was fixed for, it says:
I'm assuming it won't be 3.96% and will be whatever it is on the 30th April rather than what it was then when I took it out?
Unfortunately my fixed rate comes to an end tomorrow. The CBS have told me my mortgage will go up by about £150 a month. Because of this I asked my mortgage adviser to shop around for me and as a result I move to a new provider from Monday with a lower monthly payment. It's definitely worth shopping around
Getting a fixed actually proved to be more expensive as they are making them high due to the interest rates instability. It's a tracker (1% above base rate)Is that another fixed? What sort of interest rates are you getting? Sorry to be nosey!
Getting a fixed actually proved to be more expensive as they are making them high due to the interest rates instability. It's a tracker (1% above base rate)
Just double checked how long mine was fixed for, it says:
I'm assuming it won't be 3.96% and will be whatever it is on the 30th April rather than what it was then when I took it out?
Yes, that's only illustrative. Their SVR is currently 4.91%
Won't that mean that if it jumps up massively it could double etc?
That's always the risk yes. On the flip side though, if by some miracle it drops so will my repayments. Also, I can switch at any time without penalty if a better offer becomes available whereas, if I went for a fixed and a better offer came up, I would need to pay an early repayment fee which can be quite highWon't that mean that if it jumps up massively it could double etc?
That's always the risk yes. On the flip side though, if by some miracle it drops so will my repayments. Also, I can switch at any time without penalty if a better offer becomes available whereas, if I went for a fixed and a better offer came up, I would need to pay an early repayment fee which can be quite high
Getting a fixed actually proved to be more expensive as they are making them high due to the interest rates instability. It's a tracker (1% above base rate)
I must admit I struggle a bit with why a mortgage that a bank or building society has already granted should be subject to any changes in interest over its life. Why is this passed down to the borrower when it isn't our issue?
I must admit I struggle a bit with why a mortgage that a bank or building society has already granted should be subject to any changes in interest over its life. Why is this passed down to the borrower when it isn't our issue?
Yeah I don’t get this. Surely they borrowed the money at the base rate when I took the mortgage out?
Could be some great value repossessions available thus time next year
i think it is because the bank/BS has borrowed that money from someone else at something above the BoE base rate. If the rate goes up, they need to pass those increases on to you, as they have to pay it back too. That is why a fixed-rate mortgage is always sold at a higher rate the longer it lasts for - it is to counteract the risk of rates increasing.I must admit I struggle a bit with why a mortgage that a bank or building society has already granted should be subject to any changes in interest over its life. Why is this passed down to the borrower when it isn't our issue?
Let’s hope we don’t go back to the 1980’s rates then 15% mortgages will make yours eyes water.Our deal - fixed rate - up in Dec...
Just had call with broker - looking at going from paying 850 to 1300 per month over a further extended period!...on the best deal WHAT THE F**K!!??
It's a worry.. ...Let’s hope we don’t go back to the 1980’s rates then 15% mortgages will make yours eyes water.
You need to speak to a broker ASAP as I think you can exit your current deal when it has 6 months remaining & the way things are going it could be even worse in April.Another £100 a month at the moment
There are going to be a lot of houses reposessed.
I must admit I struggle a bit with why a mortgage that a bank or building society has already granted should be subject to any changes in interest over its life. Why is this passed down to the borrower when it isn't our issue?
Yeah I don’t get this. Surely they borrowed the money at the base rate when I took the mortgage out?
They’re making them high because they are forecasting significant base rate hikesGetting a fixed actually proved to be more expensive as they are making them high due to the interest rates instability. It's a tracker (1% above base rate)
It was under 3% just a few months ago.Because the cost of borrowing money has gone up. You’re essentially just paying a risk premium on top of the banks estimate of what the cost of borrowing money will be to them over the life of the fixed term. Hence the longer the fixed term the higher the % rate. It’s risk management
You can totally get products that are fixed rates for the life of the mortgage - in fact these types of products are the most standard in the US - you generally tend to fix for 15 year or 30 year terms. The rate though is higher
What was?It was under 3% just a few months ago.
It's obviously some risk sharing thing they do across the mortgage book but like everything is stacked against the consumer
Because the cost of borrowing money has gone up. You’re essentially just paying a risk premium on top of the banks estimate of what the cost of borrowing money will be to them over the life of the fixed term. Hence the longer the fixed term the higher the % rate. It’s risk management
You can totally get products that are fixed rates for the life of the mortgage - in fact these types of products are the most standard in the US - you generally tend to fix for 15 year or 30 year terms. The rate though is higher
But why though? I know in practice it’s not a chunk of money borrowed there and then, but effectively it is. It’s basically money for old rope surely?
Because you're not paying the bank back really...
The majority of mortgages aren't actually held by the banks...they're packaged up and sold off as mortgage backed securities to big bad investment funds. Bank says hello Schmee, here's a 200k loan for 2% interest fixed for 5 years. Then the Bank says hey investment fund - do you want to buy this asset and make 1.9% on 200k guaranteed for 5 years? Here you go. Then the bank takes a little piece for themselves. but passes through the repayments.
When the fixed term is up though it's a total reset and it's all based on the cost of borrowing the capital which all traces back to the base rate essentially
Because you agreed to it and you’re posting about it on a message board I guessYeah but why is that my problem?
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