Thursday, 28 May 2009

Mortgage rates

For my part, my mortgage rate was fixed for 5 years and that contract ends in May next year. I just hope that these ridiculously low rates that are prevalent just now will stick around long enough that I can fix into another long term low rate in May, and not have to worry for some time that rates could very easily, and in fact are likely to, go into double digits at any time and with little notice. I would refinance right now to a longer term fixed rate, if it wasn't going to be penally expensive to terminate the current contract ahead of its time.

It seems that Stephanie Flanders thinks along similar lines.

7 comments:

Fauvi said...

Can't you take a forward mortgage?
For my part, Im not sure if it's not better to rent and save in real money. I've fixed my mortgage very high to get rid of it sooner and now I regret it. there are days where I think i would be better of renting.

DP said...

I am interest-only, fixed rate for a few years. If the wheels fall off in the UK and rates rocket, I'll be glad of the bit extra I am paying now to have this fixed rate for a few years.

Instead of paying off some principle each month via a standard repayment mortgage, or the other "standard option" of paying into an endowment policy with the hope the shares will pay the mortgage off real soon (yeah, right! [snigger] ), I keep the money in escrow myself. Sometimes buy gold with it, but keep a bunch of cash.

I figure if something bad happens, I can use that cash to keep paying the interest at least, giving me time to work something out that is more sustainable. When there's too much cash for that buffer zone, it's Gold Time!

Simples.

DP said...

TBH Fauvi, I've seriously considered selling and renting myself. But the wife (and kids) really wouldn't like being nomads, wandering from one rental property to another, when they had to get out of because the "owner's" bank had to repossess it. Also, have you seen the state of the decoration, fixtures and fittings in rental property? [shudder] Makes even my very humble place look like a palace!

Fauvi said...

Oldinvestor said"austerity" but when you have children like we do it's not the easy way of course. In Germany renting is becoming increasingly higher priced, quality is quite under well being level. The tragedy of debt slaves.

DP said...

So much for the abolition of slavery, huh? :-\

Now, almost everyone is a slave, and worse - most don't even realise. They will argue until they are blue in the face to defend the status quo that they know. Better the devil they know. :-(

DP said...

So much for the abolition of slavery, huh? :-\

Now, almost everyone is a slave, and worse - most don't even realise. They will argue until they are blue in the face to defend the status quo that they know. Better the devil they know. :-(

Fauvi said...

Oldinvestor said"austerity" but when you have children like we do it's not the easy way of course. In Germany renting is becoming increasingly higher priced, quality is quite under well being level. The tragedy of debt slaves.

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