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I should probably have given more details, sorry. No balance to transfer to it, I don't care about interest rate as it'll be paid in full every month. Usable as widely as possible. There don't seem to be any "buy stuff anywhere, get money back you can spend anywhere" cards, or at least ones that seem to fit me at moneysupermarket. It's all "spend anywhere but get supermarket loyalty points back" (Tesco/Sainsbury) or "spend only at participating places" (Virgin, and they don't even give a list of valid places!) Santander do a proper cashback but that's 0.5% and has a £3 fee, so I'd have to spend 600 a month just to break even.
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Apr 4, 2023 11:37
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Clarence posted:What's a good cashback credit card? I currently use a debit card and that's stupid. Amex is pretty much always going to be the best game in town, but check MSE. I have the Platinum Cashback CC and make a couple hundred a year. It’s obviously not usable everywhere but it’s more widely than you’d expect mfcrocker fucked around with this message at 11:40 on Apr 4, 2023 |
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Apr 4, 2023 11:37
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I've got an Amex Platinun I get cashback on that I use for groceries and lots of work expenses that just gets paid off in full each month. Usually gets me a couple of hundred back each year You get a much better rate to start off with though so if you've got a big expense coming up maybe wait for that before you get one With PayPal you can use it pretty much anywhere online too
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Apr 4, 2023 11:42
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sebzilla posted:Hey, money brains. I've got £x000 that I'm going to want to put towards a house deposit later in the year (or maybe early in 2024 but almost certainly in <12 months.) Where's the best place to dump it in the meantime to get a bit of interest? Probably whichever instant access/short notice account is top here: https://www.moneysavingexpert.com/savings/savings-accounts-best-interest/ Seems like the obvious answer but ultimately anything that’s a better return will require more time than 12 months, especially at the level of risk you’re working with if you have it saved for a deposit. Your other big option is to dump it as an early repayment into a mortgage if by not being a first time buyer you mean you have a property with a mortgage now, but that’s assuming you will be selling that in order to get the other place, and assuming that the mortgage interest rate that you might currently have is more than the rates in the savings accounts. Hobo fucked around with this message at 00:04 on Apr 5, 2023 |
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Apr 5, 2023 00:01
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Hobo posted:Probably whichever instant access/short notice account is top here: https://www.moneysavingexpert.com/savings/savings-accounts-best-interest/ Thanks, I was thinking about overpaying the existing mortgage as well but you're right, 2.2% interest on the mortgage vs. 3.5% on savings makes the decision for me. If we do end up deciding to stay here past the end of this mortgage term I can always pay off a lump then, no way we're renewing at that good a rate unless things change dramatically in 9 months.
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Apr 5, 2023 09:01
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There seems to be something in the British psyche that prioritises paying a mortgage off - even partially - over putting money elsewhere. Our mortgage rate is 2.34% and it's a no-brainer to put the money elsewhere for 3.5 to 4% <insert risk/reward/timescale/etc. decisions here!> but there is always that little nagging voice at the back of the mind telling you to "Pay off the mortgage! Peace of mind! Stop the bank owning part of your house!"
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Apr 5, 2023 11:08
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Worth noting that savings interest is taxable, so the 2.2% / 3.5% differential isn't quite as big as it first seems. I generally agree though, I hate the idea of concentrating all my money in one pile of bricks. Having liquid assets available that I could use to pay my mortgage off if needed seems way preferable to actually paying it off faster than necessary.
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Apr 5, 2023 11:21
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peanut- posted:Worth noting that savings interest is taxable, so the 2.2% / 3.5% differential isn't quite as big as it first seems. Depends on other things - for a regular basic rate tax payer, the first £1000 interest is taxfree (at the moment) but if you are low income it can be as much as £5k, higher income, it can be less. https://www.gov.uk/apply-tax-free-interest-on-savings
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Apr 5, 2023 11:27
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With late stage capitalism being a bullshit rollercoaster ride, I like the idea of owning a house outright because regardless of whatever else happens, it should roughly be worth 1 house. Taking a year's worth off last year has worked out pretty well given our fix ends in a month, turns out our monthly payments are going to be the same But yeah, in general you're all right and saving it makes way more sense
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Apr 5, 2023 11:29
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Can you put a price on mental well-being of owning your house out right? Once I hit my initial investment goals (where compound interest really starts kicking in), I'll be switching to overpayments in mortgage.
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Apr 5, 2023 12:02
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Pablo Bluth posted:Aren't cash back cards fairly underwhelming now due to the limits on processing fees? Probably more like, why bother with this 'vigorous buccaneering capitalist competition' thing, when it's so simple for the ungrateful, disloyal serfs to switch their bank, cards, utilities etc these days?
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Apr 5, 2023 22:31
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so I could say that I finally figured out what this god damned cube is doing. Get well Lowtax.
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Clarence posted:There seems to be something in the British psyche that prioritises paying a mortgage off - even partially - over putting money elsewhere. Totally agree - and while I understand that the security of having the house debt paid off has real value, I wish there was more of a discussion that it is a trade off with real alternatives rather than just a generic good thing to do. There’s a number of models that show that over several decades you can be hundreds of thousands of pounds better off by putting the monthly amount in an investment account instead, but it is rarely shown as an option when it comes to mortgage overpayment discussions.
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Apr 6, 2023 00:58
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There's also the perceived trade off of getting a guaranteed (mortage rate)% saving by paying it down against a potential stock market % rise - many people can't process the long term effects of compounding gains at a time where both consumer sentiment and the markets themselves are heavily fearful of short term losses, which is also amplified by everyone worried over the cost of living crisis, market shocks and available mortgage rates rising every quarter with interest rates I am planning to overhaul the OP during the Easter weekend to bring some sections up to date for 2023/4 so sit tight!
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Apr 6, 2023 09:39
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I'm stuck in a stupid and relatively trivial conundrum: I inherited some money this time last year which I stuck into a vanguard account, which is currently running at about -5%. In hindsight, I should have used this money to pay off my student loan, which only has a few grand left in it. I am now umming and aahing over whether to take the money out of vanguard, absorbing the loss, and pay off the loan. Or just keep repaying the loan (plus interest) for the next couple of years, and hope the vanguard account recovers and I actually make some money or at least break even. What should I do, financial gurus? If it helps to answer, the inheritance and loan amounts are circa £10k and £5k respectively.
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Apr 6, 2023 09:44
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What's the interest % on the loan? If it's less than 4% leave it and keep paying it off monthly, over time the Vanguard return should outweigh this If the loan % is over 4% ask yourself if you have the discipline after paying off the loan to return the monthly payment that was going towards the loan back to the investment account to minimise the loss - if the fund recovers you'd be topping it up and long term this will all compound anyway, if it continues to drag its feet/reduce over the short term then you're buying back into it at a lower cost average and will get the gains sooner. If you make this a habit you can even keep adding to the Vanguard account after making it back up to £10,000 and have more in the long term to achieve the goal you put it in to do (usually retire or pay a house deposit) The worst thing you can do is pull the money to pay off the loan and then not pay yourself back as you'd eat the loss permanently and be in a worse position in the long term by only having a £5,000 investment growing rather than a £10,000 one - if you actually wanted or needed that money to refurbish / buy a car / go on holiday it shouldn't have been invested in the first place Doccykins fucked around with this message at 10:06 on Apr 6, 2023 |
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Apr 6, 2023 09:59
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Doccykins posted:What's the interest % on the loan? If it's less than 4% leave it and keep paying it off monthly, over time the Vanguard return should outweigh this Thanks for the advice! The interest on the loan is 4.5%. If I do pay off the loan, I was planning on paying the difference in my salary every month into an instant access isa - as I'm getting 3.5% on my Principality one atm. I guess I don't have that much faith in the markets right now, so worry that if I put it into vanguard I'll just be pouring good money after bad. I am an idiot, though.
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Apr 6, 2023 11:02
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The Perfect Element posted:Thanks for the advice! When it comes to these sort of investment accounts you’re generally looking at keeping it there for at least 5 years, if not more like 10+. The markets are in a slump at the moment but that’s just a normal cycle - if you don’t need the money it’s generally better to keep it there, assuming we’re talking about a well diversified portfolio and not just a couple of random stock picks. What really makes people lose money is having to sell in a slump because they need the cash for whatever reason, instead of keeping the position and just riding it out.
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Apr 7, 2023 01:08
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I have an old credit card account I don’t use (and don’t pay any fees for), and they’ve sent me a letter saying they will reduce my credit limit if I don’t text them to keep it at the existing limit. Is it better for my credit rating to: (1) keep the higher limit with an instigating text; or (2) let it reduce My gut says (1), but I’m not sure if texting to keep the higher limit will register as an application for credit and hit my record. I don’t need the credit itself.
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May 8, 2023 13:22
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Keeping it high is better assuming your use of that credit doesn't change. Some credit scores specifically look at what percentage of the credit you use that is available to you. So the higher your limit the smaller the percentage you are likely using (assuming you are sensible) which they like. ie if you have a limit of £1000, only using £250 and paying it off looks better than using £900 and paying it off. Mega Comrade fucked around with this message at 13:38 on May 8, 2023 |
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May 8, 2023 13:36
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Oh yeah, I get that principle. I guess what I’m specifically asking is whether in this case the request to keep my limit unchanged (because if I do nothing it will be reduced) will count as a request for credit and potentially negatively impact my credit score.
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May 8, 2023 15:45
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I wouldn't worry about it, credit score is really not used in the UK and is just a thing the agencies made up to try and sell you credit monitoring and finance products.
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May 8, 2023 16:20
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That's flat out false. There are 3 main credit agencies in the UK and almost every mortgage provider and bank in the UK country uses one of them if not all three. Many of the banks even list the ones they use. https://www.lloydsbank.com/understanding-credit/what-is-a-credit-score-how-does-a-credit-score-work.html https://www.nationwide.co.uk/help/credit-scoring-guide/ Mega Comrade fucked around with this message at 16:30 on May 8, 2023 |
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May 8, 2023 16:27
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Lenders takes your actual credit history from the agencies and feed it into their internal credit models. No lender is looking at the number Experian or Clearscore show you and making a lending decision or interest rate offer based on that. You can say that the credit score number is based off the same data so is going to be a reasonably good proxy for how a lender will view your record, but they will never be totally aligned for a lot of reasons - lenders will also be looking at affordability, past dealings, LTV and other stuff that your credit score doesn't reflect. If you don't have missed payments on your record there's not much reason to be bothered about it. The constant movements in the number and tactics for finessing it are all really just head games the ratings agencies made up to sell you credit products.
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May 8, 2023 16:46
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Mega Comrade posted:That's flat out false. Good reason to avoid Halifax and Nationwide - they will always do hard credit searches for mortgage applications. Most other lenders will just do a soft one which doesn't appear on or impact your record.
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May 8, 2023 17:45
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This is fairly niche but I'll give it a go. Lots of speculation in the news about property taking a huge nose dive at the moment. We're selling our house in the country after 3 years, we bought it in covid with no stamp duty and undervaluation so we're feeling pretty smug about the equity increase. We're moving back to London and need a bigger loan, rates are pretty garbage but we can port our existing mortgage at 2.69% and will need another at 4.5-5% probably. Thing is, we could just sell, rent in London, and stick our equity in a couple of fixed 5.3% savings accounts. This would give us a good roi for a year or two and not leave us holding the bag if property does indeed take a further nosedive, and arguably rates might be better next year (if they aren't we just keep collecting interest). Is this stupid? Should we just lowball the properties we want in London to absorb a market downturn?
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Jun 9, 2023 16:25
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Shelvocke posted:This is fairly niche but I'll give it a go. Why would property values take a nosedive? Interest rates are higher than they have been for a while but in a historical context they're fairly normal. The fact that lenders are straight up pulling or hiking two-year fixes and giving preferential rates on five-year fixes is highly suggestive that they are confident rates will fall during those periods. I doubt we'll go back to 0.1% rates any time in the next decade, but this is a country built on credit during historically low rates. Ultimately, your home is not an investment and if you stop thinking of it as one and instead focus on what your long term plan is in terms of where you will be living and use your equity accordingly, you'll be fine. I'm soon to complete on a new place, the list price was £350k and we ended up agreeing on £305k within the space of a morning back in February. My argument was I could see that the property had been up for sale for months, interest rates were only going one way thanks to the moron mini budget, which would restrict the market for buyers. I'm no master negotiator, but sometimes you end up talking with somebody who just wants the money to move on!
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Jun 9, 2023 17:36
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Rent in London is ridiculous right now. If you have the deposit and plan to stay more than 5 years I’d buy for sure. Less than that and stamp duty starts to really add up though.
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Jun 9, 2023 17:41
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Interest income is also taxable, so assuming you’re a higher rate taxpayer you’ll be losing 40% of all the income over £500. I’d say at best we’re looking at nominal house prices staying roughly flat for a couple of years (so a decent sized real-terms fall). Any significant nominal fall seems wildly unlikely.
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Jun 9, 2023 17:51
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Charles Leclerc posted:Why would property values take a nosedive? Interest rates are higher than they have been for a while but in a historical context they're fairly normal. You're correct about property prices not necessarily taking a nosedive, however interest rates are deceptive because it's not just the rate itself that's important. Interest rates right now are historically at very high levels, when taking it account the size of borrowing and how it relates to people's incomes. https://twitter.com/EdConwaySky/status/1572975559449407489 To quote the example he gives, "For instance, take 1980. Back then, official BoE interest rates were on average 14.2%. But because people were much less heavily indebted, because their incomes were much higher vs their repayments, that was, in affordability terms, EQUIVALENT to 3% in today’s interest rates." Mortgage rates are now far beyond 3%. Also, rates on five-year fixes just indicates (in most cases) what the mortgage provider judges they'll be able to resell as a mortgage bond. And those markets are constantly adapting to new information as it arrives. Five-year fixes in the past few months have gone up substantially as new information has come available, and are at substantially higher levels compared to this time last year.
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Jun 9, 2023 17:56
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Thanks for the advice, I think we'll probably buy. Apart from anything else it's difficult psychologically to go from paying a mortgage to that money just evaporating at the end of the month.
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Jun 9, 2023 21:00
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Aertuun posted:You're correct about property prices not necessarily taking a nosedive, however interest rates are deceptive because it's not just the rate itself that's important. Yes, as I said: Charles Leclerc posted:I doubt we'll go back to 0.1% rates any time in the next decade, but this is a country built on credit during historically low rates! The implication being that rates being where they are is absolutely temporary. 1980 is a specious comparison from a hack TV journalist because it ignores the context that it was before the credit boom, 1992 is a far more comparable example because rates spiked when people were very much loaded up on credit which up to that point had been comparably very cheap.
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Jun 9, 2023 23:08
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Charles Leclerc posted:The implication being that rates being where they are is absolutely temporary. 1980 is a specious comparison from a hack TV journalist because it ignores the context that it was before the credit boom, 1992 is a far more comparable example because rates spiked when people were very much loaded up on credit which up to that point had been comparably very cheap. I think you may be missing the point; when comparing interest rates, it's important to look at the effect they're having, not just on the percentage rate itself. The wider economic picture was radically different in 1980 in the UK (40 years ago), but this was specifically looking at the effect this would have on people's lives. In any case, you could handily draw your own comparisons by looking at 1992 on the same graph. So saying that interest rates are "normal" from a historical perspective is only correct through a really, really narrow framing. In any case, trying to predict either interest rates or house prices is a fool's errand. I'd recommend Ed Conway (in terms of his Twitter feed at least) to anyone reading the thread. I'm not familiar with any of his TV work, I mainly follow his online writing. In particular he's spent a lot of time looking at materials and sources of inflation over the past year. In other news, I'm not sure where you're getting your predictions on interest rates from, but bear in mind you got your January prediction completely wrong. Charles Leclerc posted:Rates are already falling from their peaks (albeit slowly) and the direction of travel for interest rates is somewhat more predictable than wider investment markets.
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Jun 10, 2023 07:45
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And for those interested in such things, here's a graph showing the "money in existence" in the UK, over time. Or to put it accurately, "Broad money (M4) in United Kingdom, 1900–2020, stated in millions of pounds sterling". This doesn't necessarily tell an entire story however, but it's a good broad brush indication of why direct comparison of interest rates as percentages over historical periods doesn't make sense. Looking into it more deeply requires going into effort post territory however. The world is very complicated! e: If you're wondering what happened in the early 70s, to quote the article I got this from. "On 15 August 1971, President Nixon announced that the convertibility of the US dollar into gold would be ‘temporarily’ suspended. That temporary basis has now been going on for 50 years and counting." Aertuun fucked around with this message at 08:19 on Jun 10, 2023 |
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Jun 10, 2023 08:17
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To be a fool. I think they will increase again when interest hits 5.5% and as inflation slows down fall back to around 3% and just stay there. House prices will stagnate and increase just below inflation, so decreasing in real terms. Which honestly would be a good thing Mega Comrade fucked around with this message at 08:36 on Jun 10, 2023 |
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Jun 10, 2023 08:18
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I'm dealing with my dad's estate. Looking for an easy access account that money can go in and out of easily as money comes in and is divided between the beneficiaries. I've decided that while it's under my control the money should be earning the best possible interest rate (interest also split between beneficiaries in the correct proportions). But I'm old and I've only ever dealt with high street banks and building societies. Looking at money supermarket all the top interest rates are with places I've never heard of. As long as they are FSCS protected is that all I need to worry about? Any recommendations for ones that people have had good experiences with?
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Jun 10, 2023 09:02
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Marcus will give you 3.5% instant access and you can open an account online in 10 minutes. Not the best rate out there but you can be comfortable Goldman aren’t going to lose your money.
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Jun 10, 2023 09:25
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Aertuun posted:I think you may be missing the point; when comparing interest rates, it's important to look at the effect they're having, not just on the percentage rate itself. The wider economic picture was radically different in 1980 in the UK (40 years ago), but this was specifically looking at the effect this would have on people's lives. In any case, you could handily draw your own comparisons by looking at 1992 on the same graph. The reason I bought up 1992 was because it was far more contextually relevant in reference to property prices/mortgages/interest rates, which was the frame of reference. If we're talking about general cost of living then you can pick any point in time and make valid comparisons. Mortgage rates did come down for a period after January (from which you completely yanked my post out of context), it's only in the last few weeks that providers have decided to pull a bunch of products. Again, as I have previously stated 5 year fixes being offered at lower rates than 2 year fixes demonstrates that there is a wide expectation that this trend will continue over the long term. Surprisingly, things change in financial markets in response to changes in conditions. Theophany fucked around with this message at 22:59 on Jun 10, 2023 |
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Jun 10, 2023 22:57
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As a little update, our deposit size and credit scores mean we should get the "best" mortgage rates for purchasing, yet those rates are now over 5% for a 5 year fixed and going up by the day. Difficult to know how to proceed - it no longer seems like a good idea to get the biggest mortgage we can afford like it was during covid.
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Jun 13, 2023 15:39
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Shelvocke posted:As a little update, our deposit size and credit scores mean we should get the "best" mortgage rates for purchasing, yet those rates are now over 5% for a 5 year fixed and going up by the day. Difficult to know how to proceed - it no longer seems like a good idea to get the biggest mortgage we can afford like it was during covid. A general adage I've read a few times is that long term wealth comes from avoiding disaster rather than achieving fast success. Without knowing your full financial situation it's difficult to comment, but obtaining a mortgage that you can *easily* afford now will give you a buffer zone for any change in circumstances (and potential raise in interest rates) going forward.
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Jun 13, 2023 16:07
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Charles Leclerc posted:Mortgage rates did come down for a period after January (from which you completely yanked my post out of context), it's only in the last few weeks that providers have decided to pull a bunch of products. Again, as I have previously stated 5 year fixes being offered at lower rates than 2 year fixes demonstrates that there is a wide expectation that this trend will continue over the long term. Surprisingly, things change in financial markets in response to changes in conditions. If 5 year fixed rates are being offered at lower rates than 2 year fixes, it might be because there's an expectation rates will be lower in the future. Or, it might not. Without greater insight into the mortgage bond market (anyone willing to speak up?), we don't have any idea why they might be lower. And even then, how much visibility would that person have. Maybe there's abnormally high demand for two year bonds (which can be caused by all manner of reasons), or abnormally low demand for five year bonds (again, could be caused by many different reasons). No-one knows. If someone can correctly predict the direction of interest rates, mortgage bonds, or any other financial products, they shouldn't be posting on an internet forum. They should be out there making billions. To predict the future course of interest rates in the UK, you'd probably want to be able to predict the following: * What's going to happen to US interest rates. * What's going to happen to inflation within the UK. * What will be the outcome of the general election coming up, and what will the incoming government's policies be. * What's going to happen to the housing market in the UK, and how is that going to affect different regions. * The outcome of the war in Ukraine. * What will happen with China and Taiwan. * How is the UK and EU trading relationship going to develop. * How will the UK economy do over the next few years. All of the above will affect UK interest rates in some fashion. All the above to say; if you're trying to make an important financial decision, no-one can predict the future. No matter how qualified or authoritative they appear to be.
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Jun 13, 2023 16:29
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