Mortgage

jackrussell101

Member
Mixed Farmer
Agreed but whilst businesses are choosing to hire rather than invest in kit then real wage inflation will continue to grow.
I think technology for firms is becoming alot cheaper so I think you have to ignore low investment figures in pounds data. Take our UK minimum wage now going up to £8.21, now look at self service checkouts in the supermarkets, that technology would have been expensive 15 years ago and has come down in price rapidly. If wages go up alot then expect more self service checkouts to appear...
 
Agreed. It may well be that we are currently in a sweet spot with record employment and rising wages. I read only today that employment is only really rising because brexit uncertainty has meant investments have put on hold.
 

Exfarmer

Member
Location
Bury St Edmunds
I am not arguing rates will go up , but fixing at this rate cannot go wrong as it did in the mid “noughties” when rates collapsed and smart borrowers fixed on 8% + were complaining that they were missold.
Nobody is smart at forecasting future rates, except the guy who gets it right. We Never hear of the ones who get it wrong!
 

texas pete

Member
Location
East Mids
Agreed. It may well be that we are currently in a sweet spot with record employment and rising wages. I read only today that employment is only really rising because brexit uncertainty has meant investments have put on hold.

No interest in a B debate, but it is amusing when it is blamed for any negatives and then as a double negative, for a positive. Still, these scribes have to make a living I suppose.

Personally, I fixed a loan in 08 as rates were cheaper. Paid off now but variable would have been significantly cheaper, :rolleyes:
but we survived.

As @Exfarmer says, you are only smart when you get it right, but if you need it and can re-pay it, crack on.
 

Werzle

Member
Location
Midlands
Bringing this thread back to life because it seems money is going to get even cheaper to borrow and some AMC agents have recently stated that fixing a mortgage now( because of the economic slowdown due to coronavirus ) could well be a great financial move, even though it doesnt look likely rates will rise for yrs.
1) Some of the above comments in this thread show how quick things can change.
2) Do amc want to see 3 yrs accounts?
3) When people say amc charge a large penalty for paying off fixed loans early , is that ontop of the loan and expected interest or just ontop of the loan?
 

Juggler

Member
Livestock Farmer
Location
Anglesey
Bringing this thread back to life because it seems money is going to get even cheaper to borrow and some AMC agents have recently stated that fixing a mortgage now( because of the economic slowdown due to coronavirus ) could well be a great financial move, even though it doesnt look likely rates will rise for yrs.
1) Some of the above comments in this thread show how quick things can change.
2) Do amc want to see 3 yrs accounts?
3) When people say amc charge a large penalty for paying off fixed loans early , is that ontop of the loan and expected interest or just ontop of the loan?

For point 3, I'm guessing you mean early redemption charge which is a (in my case large) lump on top of the balance of the loan.
I've got this issue at the minute, each time I've asked for a quote on the early repayment charge its gone up significantly even though the amount outstanding is less and the remaining fixed period is less, anyone care to explain to me hoe that works?
 

midlandslad

Member
Location
Midlands
Yes, fixed rates are currently very competitive particularly long term 30 year rates.

Early repayment charges are calculated based on the bank’s lost margin for the remainder of the fixed term. Therefore the lower rates and the bigger the differential between your fixed rate and what they could lend it out increases so will the redemption cost.
 

Wombat

Member
BASIS
Location
East yorks
We just took out a loan to buy some land and you can early repay when ever we want.

I think before the AMC was regulated by the FCA it had some different charges that caught people out when the didn’t understand them properly
 

Werzle

Member
Location
Midlands
We just took out a loan to buy some land and you can early repay when ever we want.

I think before the AMC was regulated by the FCA it had some different charges that caught people out when the didn’t understand them properly
Did you use the AMC , fix the rate and have to show them your accounts?
 

midlandslad

Member
Location
Midlands
People were caught out by fixed rate redemption costs, which were significant when fixed rates were taken out at 10+% and then people were repaying when rates were sub 5%. Considering how low rates are they will only go one way.
 

Werzle

Member
Location
Midlands
so borrowing now means that you are unlikely to have big redemption charges as interest rates are likely to rise in the future? what sort of interest rate would you pay to borrow 1m on interest only just now, fixed for 30 years
I take it to mean that because the fixed interest rate is now alot lower and the projected interest over the loan period is therefore lower then the penalty for paying it off early is lower, which makes sense. Borrowing a million + will get you a far lower rate than borrowing a few hundred thousand but the rate they offer you depends on your ability to pay it back/risk, your profitability and your assets
 

jackrussell101

Member
Mixed Farmer
so borrowing now means that you are unlikely to have big redemption charges as interest rates are likely to rise in the future? what sort of interest rate would you pay to borrow 1m on interest only just now, fixed for 30 years
You could argue that interest rates are more likely to fall in the future than rise, especially so in the short term. If that's the case then redemption penalties would be an issue with fixed loans. On the other hand if interest rates rose and you had fixed the bank could actually pay you to break the fix as they would find it very easy to resell that low fixed money in a higher interest rate market...

Sometimes it's good to do half fixed half variable then you will never get it completely wrong!
 

SFI - What % were you taking out of production?

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    Votes: 66 35.1%
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    Votes: 30 16.0%
  • 50-75%

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    Votes: 3 1.6%
  • 100% I’ve had enough of farming!

    Votes: 7 3.7%

Red Tractor drops launch of green farming scheme amid anger from farmers

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As reported in Independent


quote: “Red Tractor has confirmed it is dropping plans to launch its green farming assurance standard in April“

read the TFF thread here: https://thefarmingforum.co.uk/index.php?threads/gfc-was-to-go-ahead-now-not-going-ahead.405234/
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