2 Year Fixed Rate Mortgages
Natwest 2 Year Fixed Mortgage – 60% LTV
2 Year Fixed Deal
- Initial Rate – 1.21%
- Maximum 60% Loan To Value (LTV)
- 2 Year Fixed Rate
- £250 CASHBACK
- Product Fee – £995
Call NatWest FREE on 0800 158 2934
Rep example: A mortgage of £156,000 payable over 22 years initially on a fixed rate for 2 years at 1.21% and then our variable rate of 4.24% for the remaining 20 years would require 24 monthly payments of £673.34 and 240 monthly payments of £887.65.
The total amount payable would be £230,379.74 made up of the loan amount of £ 156,000 plus interest of £74,379.74. A product fee of £995, valuation fee of £352 and a CHAPS fee of £30 are also payable.
The overall cost for comparison is 3.8% APRC representative
Applies to Home Movers only, excludes First-time Buyers. Cashback will be paid to the solicitor on drawdown of the mortgage, offer can be changed or withdrawn at any time. Early repayment charge applies until 31.03.2022
Your home may be repossessed if you do not keep up repayments on your mortgage.
Reverts to 4.24%
Reverts to 4.24%
Reverts to 4.24%
How Much Can I Borrow For A Mortgage?
It is very important that when considering a mortgage you work out how much you can afford. While there is a greater onus on mortgage lenders to lend responsibly you will also need to consider what level of borrowing is appropriate for your circumstances.
In simple terms lenders will base how much you can borrow on a multiple of your income (joint income for couples). However there are a number of factors that will determine what you can borrow from a mortgage company.
Since April 2014 UK mortgage lenders are required to apply strict rules to what they can lend to you based on your personal circumstances. In assessing affordability lenders will not only look at your income but also your outgoings e.g. monthly household bills. Lenders will look at your bank statements typically over the last 3 months to determine whether you can afford the mortgage you are looking for.
Many mortgage deals have initial periods where preferential terms are offered and borrowing costs are lower than normal – when this discounted period ends make sure you can afford any reasonable increase that may kick in. In assessing affordability lenders will take into account your income and outgoings and your current employment history. In calculating disposable income your total income will be taken into account less other debts you may have and living expenses. The lender considering your mortgage application will have their own method of assessing affordability but it makes sense to do your own budgeting calculations to ensure the monthly repayment requirement is well within your budget.
In calculating how much you can borrow the lender will apply a maximum amount you can borrow called the loan to value of the property (LTV). E.g. If you are a first time buyer the lender may stipulate a LTV of 95% which means they are prepared to lend up to 95% of the value of the property (this will be assessed by the mortgage company’s own appointed surveyor). In this scenario the first time buyer would be required to put down at least 5% deposit towards the property purchase. The mortgage rate deals offered by a lender will be affected by the level of deposit that can be put down.
Generally speaking the higher the deposit that can be put down the better the mortgage rate can be achieved.
What Are The Fees I Can Expect To Pay On A Mortgage?
Buying a property can be an expensive exercise and it is important that you are aware of all the costs that come into play when buying your home.
The costs relating to your mortgage will be set out clearly by the lender in what is known as the “Keyfacts” document provided to you.
These costs may include:
- Arrangement Fee – Charged by the lender to cover the administration costs of processing your mortgage. This will vary from deal to deal. You normally have the option of adding this fee to your mortgage but this will increase your cost of borrowing over the mortgage term.
- Mortgage broker Fee – If you have used a mortgage broker to help arrange your mortgage for you then a fee may be charged which will be outlined in your keyfacts document.
- Mortgage Account Fee – Applied by the lender at outset when you first take out your mortgage to cover the set up and termination costs of your mortgage.
- Valuation Fee – Charged by the lender to value your property in assessing the value for mortgage purposes.
- Re-inspection fees – If a lender has required you to make agreed repairs to the property a re-inspection may be required
- Higher lending charge – If you are borrowing a high loan to value the lender may decide they wish to insure the possibility that you may need to sell your home and this results in a loss.
- Early redemption charges – If you pay off part or all of your mortgage earlier than expected the lender may charge you a fee – this will be covered in your keyfacts document.
- Mortgage exit fee – Paid to your lender when you repay your mortgage.
- Insurance costs – as part of your mortgage you may be encouraged to take out insurance either by a broker or the lender to cover buildings insurance and other optional insurance such as mortgage life insurance.
Top 10 Mortgage Tips For 2020
1. If you are unsure of your mortgage options seek mortgage advice from a FCA regulated independent mortgage broker
2. Maximise the deposit you can put down on your property to benefit from the most competitive Mortgage interest deals.
3. Read the Lender Mortgage key facts document carefully to understand the costs being applied by the lender.
4. Ensure that you are comfortable that mortgage repayments (whether repayment or interest only) fall within your budget.
5. Remember that mortgage discounts are temporary and borrowing rates may go up when the discount period ends.
6. If you are remortgaging ask your current lender what deal they can offer you as well as shopping around.
7. If you lender’s valuation of your property is too low ask them to reconsider and provide supporting evidence from the sale price of other properties in your area.
8. For interest only mortgages ensure that you plan carefully how to pay off your mortgage and check at regular intervals that your repayment strategy is on track.
9. At the time of writing interest rates are at record lows. While borrowing is cheap now this situation may change so factor in a rise in interest rates into your budgeting calculations.
10. Consider mortgage unemployment insurance in the event that you lose your job. This may provide useful breathing space in covering mortgage repayments while you look for a new job.
2 Year Fixed Rate Mortgages
Advantages of 2 year fixed rate mortgages include easy budgeting – Your payments won’t change over the two year period and the potential to save money – If rates go up, your agreed rate is unaffected which could save you hundreds of pounds.
With a 2 year fixed rate mortgages you need to be mindful that if variable interest rates go down you will not benefit, and when the deal comes to an end, it can be expensive to set up another, plus, if you don’t, you automatically go onto your lenders’ variable rate, which could add a considerable amount to your monthly repayment. But if you are happy with the rate you are offered, and are keen to have a deal where you know where you are each month, a 2 year fixed rate mortgage could be right for you.
A 2 year fixed rate mortgage is one of the options you have, but this kind of mortgage deal is not suited to everyone. Doing your homework and researching the areas of mortgages that you are not familiar with will help you to get to grips with the right mortgage deal for you. This is an especially competitive area of the mortgage market so taking your time to choose the right deal is especially important.
Fixed rate mortgages and tracker mortgages are typically popular choices among residents of the UK. Fixed rate mortgages refer to an agreed monthly payment that remains the same through the duration of you mortgage policy. Many people typically take out a fixed rate mortgage for 2 years although you can arrange a much longer contract if necessary.
Alternatively, tracker mortgages are mortgages where the interest rate follows the bank of England base rate. Your repayments will be determined by the status of the base rate, so they could be low or high depending on the current economic situation. 2 year fixed rate mortgages are popular among people for a number of reasons, such as:
- You can be comfortable in the knowledge that repayment will be the same each month
- You may pay less than you would with a tracker mortgage if the interest rates are high
- Good for budgeting purposes
- Beneficial to those who perhaps have a low income
- If you are not happy with a fixed rate mortgage you can change after just 2 years
If a 2 year fixed mortgage policy sounds like the best choice to you, there are many competitive mortgage offers available. Comparing mortgage deals can enhance the likelihood that you will find a policy most suited to your needs.
2 Year Fixed Mortgage Offer – 90% LTV
2 Year Fixed Offer – Clydesdale Bank
- Initial Rate – 2.39% APR
- 90% Loan To Value (LTV)
- 2 Year Fixed
- £250 CASHBACK for First Time Buyers
Overall cost for comparison 4.8% APRC
Use the comparison table above to begin your search for the best 2 year fixed rate mortgage deal for you.