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What's the general consensus?
I have a mortgage with a very good tracker rate, currently at 1.75% I have a small second part to the mortgage which was fixed for 2 years, this period has now ended, it makes sense to fix the second part, as the interest that I'm paying on it is more than the rate that is on offer for a fixed deal, however, the lion share is on the tracker.
Not looking for mortgage advice, just a feel of what the people of STW are doing
I'm in the middle of applying to fix at 1.84% for the next two years.
Get ready to fix it but hold on until you can if you can't fix at a rate lower than that - it'll be up by April, albiet probably by 0.25% at the start at our end, but the inter-bak lending rates are starting to wobble which will push prices up before the overall rate does the same.
So I'm told.
Who knows?
BoE and Federal Reserve seem very very cautious about increasing rates... which is not a good sign for the underlying strength of the economy. I'm wondering what they know that we don't...
Worth looking at comparing current rates with the rates from 6 months or a year ago, I believe some of the banks are putting rates up now, ahead of any move by BoE so speed could be of the essence in any case
We just fixed so no doubt sticking with your tracker will be best! Depends on your size of payments and attitude to risk I suppose.
My temptation is to fix the whole lot, I've an offer for four years which will in essence have me paying £7 a month more than I am now, although I could reduce the whole lot by about £40 a month but with no fixed rate if I wanted, my concern is that I think any decent fixed rates will disappear overnight as soon as there's a sniff of a rate rise.
Or I may just default on the lot!
Mostly you lose by fixing but it's an insurance so worth paying for in some cases.
Glad I never fixed.
BoE and Federal Reserve seem very very cautious about increasing rates... which is not a good sign for the underlying strength of the economy. I'm wondering what they know that we don't...
I don't think anyone thinks we have a strong economy, we're still limping post recession.
What mudshark said ^ Fixing is an insurance.
When we first bought our house I fixed for 2 years via a broker, who then tried to sell me another fix with tales of rates rising.
I worked out that we needed rates to stay at 0.5% for 4 months to break even on what a rate rise might be.
This was around 5 years ago I think and we are so far ahead of where we would be on a fixed I gave up working it out.
Do the sums. How long do you need on a very low variable to make it worth while, and if it rises can you afford it.
As above re insurance - you'll only "win" if rates increase sooner and by by more than the boffins at the banks predict. If you think you can make that prediction better than they can then go for it.
Otherwise, make hay whilst the sun shines and clear as much of your debts whilst rates are low and you'll be better placed to weather the storms when they eventually increase
Been on various variables for the last 20 years now, and am up to the tune of several 10's of thousands as a result.
I now have the mortgage down to a point where I can pay it off if I need to, so if rates rise sharply thats what I'll do.
Fixed rates work if you cant take a risk on when and by how much rates will increase, if this applies to you, then now looks as good a time as any to fix.
I've been pondering this question for years now and have thus far held my nerve and thereby saved a bob or two.
Our tracker rate is .09% over baserate, so I think I'll risk it a bit longer yet.
FWIW I think that the 0.5 interest rate will hang around for a bit yet, more than Mark Carney and the BoE would like... this is a pretty good analysis (no fan of the torygraph per se but they are good at this kind of thing)
eckythump - 0.9% over BoE baserate, I would ride that one as long as possible, the first movement will be from 0.5 to 0.75 in order to not spook the market...
We fixed at 1.84% because th tracker worked out at 1.79%. Yes fixing is an insurance, but it's a bloody cheap one.
0.9%
0.09!
We're fixed for 2 years at 2.7% I think. Betting on rate's being higher in 2 years, but hopefully adding enough value to the house the Loan/Value tips us up into a better selection of rates.
As above re insurance - you'll only "win" if rates increase sooner and by by more than the boffins at the banks predict. If you think you can make that prediction better than they can then go for it.
This is true I suspect, although I reckon it's probably pretty close, the banks don't want to be caught with their trousers down but equally want to have a balanced portfolio, if they'd not offered fixed rates low enough pre-crash then everyone would be on tracker mortgages paying 0.09% above the base rate!
oops,
typo earlier
should have read 0.19 % over baserate.
I think I'll be riding that one for as long as possible
That is a good rate, not sure I'd ever switch out of it as can't see anyone getting that again. I'm on 0.49% above br but it's an offset tracker so happy with that.
Just completed at 1.45% fixed for two years.
Just to confuse things...
News out today about China devaluing to reduce the price of its exports, and the oil price continuing to slide...
Both of which are likely to reduce any inflationary pressure and which may stay the BoE's hand re putting rates up
We're going to fix, simply because we'd be between £50 to £100 per month better off. Regardless of what better deals may come up in the future, we're used to paying out the amount we do so if we can save that much its all good.
2 year fix seems hardly worth it to get spat out at a high SVR in two years, then higher rates to refix again. Some great 5 year fixes at 2.4ish with HSBC at the moment