18:34 PM, 5th September 2018, About 3 years ago
So, you have an aversion to short term volatility in the mortgage market and/or you are fed up with shelling out every 2 or 3 years with arrangement fees and other costs to try to stay ahead of the market.
Furthermore, there is the constant threat of rising rates because of Brexit, further mortgage regulation etc etc – the list goes on. What can you do? Where can you find some stability?
Stress testing (the amount you can borrow compared to the rental income) could also help secure the amount you need as long term fixed rates are often based on the pay rate not a notional higher minimum of 5.5% as for any loan under a 5 year fixed term.
Well, one idea would be to fix for the longer term, while rates are still low. There are options up to 75% LTV, and whilst choice is limited, you will know what you will be paying until 2028.
Looking up to 75% LTV, you could fix at 3.49%. No arrangement fees, no valuation fee and £250 from the lender to assist with your legal costs. This deal is available for purchases and remortgages. Minimum property value is £50,000.
If you have a little more equity in your property, you could look at a rate of 2.95%, £1995 arrangement fee and a free valuation on purchases and remortgages. If you are remortgaging, you will also get a free basic legal package. If you need to get out of this mortgage, Early Repayment Charges apply, but once 5 years have gone by, the only penalty is 1% of the mortgage for the remaining period of the fixed rate. So, if you are prone to changing your mind, it’s not too tragic! Minimum property valuation is £75,000.
Fixed rates can be a gamble. Who knows what’s going to happen in the coming years, but if it’s important to you that you have that certainty, then either of these two could be for you.
If you would like to investigate this option further, please contact us using the form below and I will be happy to assist.
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