Self build mortgage rate increase

[Barryscotland]

 

Just had another letter from Ecology stating another rise in my interest rate taking it to 4.74%. Thats the third rise I've had in a year although there was also a decrease as well after I submitted my EPC rating to them.

 

Out of interest would anybody share there current self build mortgage interest rate and there lender?

[KillyfadNewBuild]

Currently 4.99% and with fingers and toes crossed getting an A SAP rating to get their discount.

 

When we started the self build mortgage, like a lot of people, we couldn't even imagine how quickly things would change with the economy and the BOE base rate (though always prepared for it in the worse case scenario in my budgeting)...

 

We're just locking into the fact we are close to finishing our house which will add to our life.

[Seren161]

5.99 Newcastle BS. Although looking at the current remortgage rates as we near completion..I can see more pain on the horizon as we move to capital repayment. Was going to be “ in by Christmas” 😂 and was annoyed that our build has overrun but now actually actually happy about it…hoping for February.. just so the mortgage market can settle down .. 

[MG-Wales]

We've just received our mortgage offer: 6.50% with Hinckley and Rugby BS. 😪

 

This was 4.75% when we started the application at the end of August, so the rate has gone up by 1.75% which is more than the BOE 1.25% base rate increase in the same period of time.

 

I have asked our brokers (Buildstore) an explanation as I don't understand where the extra 0.50% comes from. Has anybody else experienced rate increases on their variable rates which differ from the BOE increases? 

 

4.74% for Ecology seems an amazing rate. I have to say that our mortgage will be very flexible (no early repayment charges) and fees are average low, but the interest right now seems extortionate.

Is anyone else on >6% rates at the moment?

[RC28]

The variable rates are not determined by the BoE base rate, they can also depend on swap rates, and the lenders discretion. 

 

We're with the Hanley, i think the current rate is around 5.94 and started out at 3.69. Their increases have loosely followed the BoE increase, last increase for example was +.75 on the BoE but .55 on from the Hanley.

 

The ecology website says their current rate is 5.49%, 4.74% could have been before the last increase?

 

We're on interest only and in a few months expect we'll be paying over double the original rate.

[jayc89]

A financial advisor recently recommended that we only consider fixed and tracker mortgages. Fixed are fixed, so you know what you pay each month and trackers are a fixed percentage above the base rate, so is transparent whereas variable/discounted deals are at the entire discretion of the lender. They can pick and choose when and by how much they change their interest rates by. 

[KillyfadNewBuild]

On 26/10/2022 at 11:17, KillyfadNewBuild said:

Currently 4.99% and with fingers and toes crossed getting an A SAP rating to get their discount.

 

When we started the self build mortgage, like a lot of people, we couldn't even imagine how quickly things would change with the economy and the BOE base rate (though always prepared for it in the worse case scenario in my budgeting)...

 

We're just locking into the fact we are close to finishing our house which will add to our life.

 

The mortgage rate is now 5.79%... what a heart breaking 4 weeks since I posted the above 😕

 

*Website still showing 5.49% but I have just been informed of the increase.

Edited November 29, 2022 by KillyfadNewBuild
Adding additional information

[MG-Wales]

On 28/11/2022 at 11:21, jayc89 said:

A financial advisor recently recommended that we only consider fixed and tracker mortgages. Fixed are fixed, so you know what you pay each month and trackers are a fixed percentage above the base rate, so is transparent whereas variable/discounted deals are at the entire discretion of the lender. They can pick and choose when and by how much they change their interest rates by. 

This sounds great for residential mortgages, but are there any fixed or tracker mortgages available for self builders?

[MG-Wales]

On 27/11/2022 at 20:07, RC28 said:

The variable rates are not determined by the BoE base rate, they can also depend on swap rates, and the lenders discretion. 

 

We're with the Hanley, i think the current rate is around 5.94 and started out at 3.69. Their increases have loosely followed the BoE increase, last increase for example was +.75 on the BoE but .55 on from the Hanley.

 

 

1 hour ago, KillyfadNewBuild said:

 

The mortgage rate is now 5.79%... what a heart breaking 4 weeks since I posted the above 😕

 

*Website still showing 5.49% but I have just been informed of the increase.

 

Somewhat reassuring to hear that we are all in the same boat, and yes, I'll also expect our rate to be keeping going up for the next year or so. Hopefully there will be some future correction of the rates to get us out of the long recession that looms.

Our broker by the way already responded that the rate increases on our mortgage follow loosely the movements of the BOE base rate. In our case the early August rate increase hadn't been acknowledged yet when we got the first illustration at the end of the month, so that explains the 0.50% extra.

 

By the way, I'm trying to understand with Buildstore (with no success yet) if the first stage release (the one that will be requested by our solicitor) must be the same as the first drawdown, i.e. if the first drawdown needs to be for the full amount of the first stage release or if it can be less. As we have a bit of cash deposit available, we would rather use a chunk of that for paying for prelims, foundations and drainage rather than starting paying interest on funds unnecessarily sitting on the bank.

[NSS]

Fixed rate savings rates have actually dropped a few points in the last two or three weeks. For example, Hodge Bank were offering a 3 year fixed rate cash ISA at 4 65% last Friday, but dropped it to 4.30% over the weekend. I suspect the higher mortgage rates will take longer to drop, but not as long as some may be fearing.

[twice round the block]

Back in the 80's we had 11.4%.....

Thank your blessings 

[Seren161]

6 hours ago, twice round the block said:

Back in the 80's we had 11.4%.....

Thank your blessings 

Now you are showing your age and wisdom 😂

[Seren161]

8 hours ago, MG-Wales said:

 

 

Somewhat reassuring to hear that we are all in the same boat, and yes, I'll also expect our rate to be keeping going up for the next year or so. Hopefully there will be some future correction of the rates to get us out of the long recession that looms.

Our broker by the way already responded that the rate increases on our mortgage follow loosely the movements of the BOE base rate. In our case the early August rate increase hadn't been acknowledged yet when we got the first illustration at the end of the month, so that explains the 0.50% extra.

 

By the way, I'm trying to understand with Buildstore (with no success yet) if the first stage release (the one that will be requested by our solicitor) must be the same as the first drawdown, i.e. if the first drawdown needs to be for the full amount of the first stage release or if it can be less. As we have a bit of cash deposit available, we would rather use a chunk of that for paying for prelims, foundations and drainage rather than starting paying interest on funds unnecessarily sitting on the bank.

The first drawdown will be as you describe but you can hopefully make up the difference in the excess interest you pay by not drawing down the next stage until your cash flow actually needs it for example..providing everything goes relatively smoothly, you could be drawing down for stage 2 when you are actually well into stage 3 etc and when you will be saving paying interest on a larger sum anyways.

[SuperJohnG]

Checked last night currently with 5.79%with ecology. I've been with them for over 2 years. 

 

Hoping to finish up and remortage in April. 

[SteamyTea]

On 29/11/2022 at 16:56, twice round the block said:

Back in the 80's we had 11.4%.....

 

Was higher in the early 1990's

But we did only borrow 3 times our wages and you could by a 3 Bed, with garage, in Aylesbury for £37,000.

Or a two bed cottage, in Weymouth, for £36,000.

[Radian]

1 hour ago, SteamyTea said:

Or a two bed cottage, in Weymouth, for £36,000.

Was that really in the early 90's? Would have said more like £50K - or maybe it was in Park Street or Littlemoor?

[SteamyTea]

8 hours ago, Radian said:

Was that really in the early 90's? Would have said more like £50K - or maybe it was in Park Street or Littlemoor?

Yes, was when the slump was at its worse.  Could have bought cheaper on Portland, but then have to put up with Portland people.  Well when I say people.....

[ProDave]

1 hour ago, SteamyTea said:

Yes, was when the slump was at its worse.  Could have bought cheaper on Portland, but then have to put up with Portland people.  Well when I say people.....

Having been to Portland just once, it would be the traffic through Weymouth that you have to crawl through every time you want to get somewhere that would put me off.

[SteamyTea]

13 minutes ago, ProDave said:

traffic through Weymouth

They used donkeys back in the 1990s, who would have thought the Olympics would end up there.

[joe90]

We used to holiday often in Weymouth when the kids were young and yes traffic in summer is really heavy, however you can get to Portland without going into Weymouth.

[Barryscotland]

Letter through the post this morning, rate going upto 5.09% with ecology which I guess in the current climate is good. We are at the stage we could switch to a normal mortgage if we could find someone to take us without a structural warranty but with the rates on offer and paying solicitors and set up fees etc I don't think I would really be any better off.

[Conor]

1 hour ago, Barryscotland said:

Letter through the post this morning, rate going upto 5.09% with ecology which I guess in the current climate is good. We are at the stage we could switch to a normal mortgage if we could find someone to take us without a structural warranty but with the rates on offer and paying solicitors and set up fees etc I don't think I would really be any better off.

FYI Virgin and Bank of Ireland (UK) don't require structural warranties. But I think you're right, market should calm down a bit in the new year.  Get you BC sign off sorted tho so you can move quickly.

[SteamyTea]

Keep an eye on bond prices, thy are the inverse of interest rates.

https://tradingeconomics.com/united-kingdom/government-bond-yield

[NSS]

On 29/11/2022 at 15:56, NSS said:

Fixed rate savings rates have actually dropped a few points in the last two or three weeks. For example, Hodge Bank were offering a 3 year fixed rate cash ISA at 4 65% last Friday, but dropped it to 4.30% over the weekend. I suspect the higher mortgage rates will take longer to drop, but not as long as some may be fearing.

And now down to 4.2%