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First time buyer fixed rate mortgage

danny101369
by danny101369 11 July 2012  |  Comments 1 comments  |  Love Love  0 loves

High all. I have saved about 40 grand and am looking to buy my first place. With a 80% LTV mortgage I can get a 5 year fixed rate for under 4%, which I perceive to be a good deal. I like the idea of fixing for as long as possible at the moment due to the low base rate.

I have a few questions which i'm hoping you guys can help me with.

1. At the end of the fixed term, I presume one shops around for a better deal, do the mortgage companies charge a fee if I decide not to use the same provider?

2. If this is the case, when I look for a mortgage is it pretty much irrelevant looking at the overall APR? The only bit that matters is the rate that is fixed right? As after this expires I can change provider if necessary?

Thanks in advance for any help, Danny

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Comments (1)

  • MikeGG1
    Love rating 879
    MikeGG1 posted

    Danny

    I would agree that a long fix at a reasonable rate is the best way to go. Rates must rise eventually, the only question is when. 5 years would be the minimum I would look at. The overall APR is irrelevant if you intend to take another fix

    The mortgage provider registers a charge against the property with HM Land Registry. At the end of the term, that charge would have to be removed and there would be a charge for that. You could enquire now how much that might be. That would not be necessary if you took another fix with the same provider or reverted to their Standard Variable Rate.

    It could also be that you left it on SVR for a while before switching to another fix. You have various options available.

    Is the mortgage portable? With a 5 year fix, you need to check in case you need to move before the 5 years are up.

    Are you buying with someone else? If that is someone to whom you are not married (or in a legal partnership) then you need to buy as 'Tenants in Common' and include a 'Declaration of Trust' which spells out what would happen in the event of a breakup.

    Mike

    Posted on 11 July 2012 | Love Love  1 love Report

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