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Interest rates in ten years?
Comments
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Ultimately any decision is based on a forward looking opinion of interest rates. Who would you suggest speaking to ?
This is my point. Ultimately, no it is not. Too many people think deciding on a mortgage is about "predicting the market". That should never be the main driving force behind deciding what mortgage to go for, so I am glad you have said it. You are not the first on here to say it and will not be the last, but it really does hit home my point.
I dont make suggestions on individual companies or brokers, but its always good to find a broker through famliy or friends who have had a good service and can reommend someone.0 -
I take your point but when it comes to judging what will happen to interest rates in the future, Jim from the pub might just be the best option if he's studied basic economics or taken an interest in history.
Well if thats how people work these days then I will just pop off down to the supermarket and ask Anne on customer services to give me a scale and polish, becuase she read some books about dentistry?
Come on guys...... when will this whole thing about mortgages actually get through to people.
You want your car serviced? *most* people dont do it themselves, they take it to a garage.
You want your suit dry cleaned? *most* people take it to the dry cleaners.
You want a filling repairing? *most* people go to a dentist.
You want a mortgage sorting? No need for mortgage advisers because every Tom !!!!!! and Harry is an expert on mortgages.
That is the reality of this country. I find it bizzaire.0 -
Ok, the question i asked was what do you 'THINK' is going to happen, nobody knows the answer to the question or i would have put was 'IS' going to happen. This wasn't a question on mortgages but interest rates so can we stick to the original question please.0
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I may be wrong, however I feel the point minimike2 is trying to get across is not to treat your mortgage like a lottery?
Your home is probably the most important asset and so needs to be protected. The OP simply asked a question for people to give their opinions-like you would if you were in the pub with Jim!! As with people like Jim in the pub and maybe Barry in the Pub or Mike in the pub, one may give a true answer, the others may add to it but be mis-informed!! It is only an opinion and that is what this forum is about!
With mortgages what people do is look at what they have and then look to see if they can better that against what will happen in the future. We all know this is a guess and so should we really be looking at this? Nobody wants to get a fixed rate only for rates to drop again and then you feel you have lost out. Human nature.
Rates will probably go lower although if fixed rates follow is to be seen. I feel that this period is a fantastic opportunity for people to secure 10 year( or more) deals whilst rates are low. Without doubt once the country starts to
recover rates will increase. The problem then will be people who take tracker rates now will be on a rate 2 or 3% above the base rate and fixed rates will be higher.
Get the best fixed rate you can find within the next three months, be happy with your choice, put the mortgage to bed and then start living your life again!0 -
This is my point. Ultimately, no it is not. Too many people think deciding on a mortgage is about "predicting the market". That should never be the main driving force behind deciding what mortgage to go for, so I am glad you have said it.
Have to say I'm slightly perplexed !
In deciding which mortgage to go for, you have a choice of Tracker / Fixed / SVR. What could possibly be more important when making that decision than future interest rates ???0 -
Originally Posted by minimike2
This is my point. Ultimately, no it is not. Too many people think deciding on a mortgage is about "predicting the market". That should never be the main driving force behind deciding what mortgage to go for, so I am glad you have said it.
Have to say I'm slightly perplexed !
In deciding which mortgage to go for, you have a choice of Tracker / Fixed / SVR. What could possibly be more important when making that decision than future interest rates ???
The most sensible way to look at this is, as has been said - historically IR were up to 16% - so the risky option (to me) is the Tracker and SVR. If you can afford to pay the interest at 16% - then these maybe a good gamble, but only if you afford it (worst case). I myself prefer the fixed rate - ok in the last 4 years i would have saved, but then again, maybe it could have gone up to 16%
This is what a professional MA would talk you through0 -
Well if thats how people work these days then I will just pop off down to the supermarket and ask Anne on customer services to give me a scale and polish, becuase she read some books about dentistry?
Come on guys...... when will this whole thing about mortgages actually get through to people.
You want your car serviced? *most* people dont do it themselves, they take it to a garage.
You want your suit dry cleaned? *most* people take it to the dry cleaners.
You want a filling repairing? *most* people go to a dentist.
You want a mortgage sorting? No need for mortgage advisers because every Tom !!!!!! and Harry is an expert on mortgages.
That is the reality of this country. I find it bizzaire.
Most people don't go to a car insurance agent though. They just use the net to help them find the lowest price.0 -
I am not sure anyone can really predict what the spot interest rate will be in 6 months time and the further out you go the greater the variability. My suspicions is they may fall a bit more, they will probably rise and might then fall again!
It does really depend on what you can afford and how much risk you are prepared to bear. Fixed rates are not as low as variable rates as a result of future expectations of rate rises and the lack of interbank lending. But get one and you have no risk and certainty of payment. With variable rates it si worth calculating what is the point in which you cannot meet the payments, if it is a couple of percentage higher than the current fixed rate then maybe you should fix. If you have a lot of headroom then you might be prepared to risk a variable rate.0 -
Have to say I'm slightly perplexed !
In deciding which mortgage to go for, you have a choice of Tracker / Fixed / SVR. What could possibly be more important when making that decision than future interest rates ???
Further proving my point.
It has already been said above. Deciding on fixed / variable / tracker / discount etc should be a decision based on your circumstances, income multiple, family & work plans etc. i.e life events and factualities. NOT on what you *think* rates will do.
If you are borrowing 5x income and the affordability is tight and you are going to the max you can comfortably borrow, is is a sensible idea to take a tracker mortgage becuase you think rates might go down? Well no not really, because if rates go up then that extra £100 could push you over the edge.
If you are borrowing 1x income at 20% LTV and have masses of disposeable income, and you are willing to absorb an increase of £200 a month if rates go up, but want to benefit in times of falling rates, is a tracker a good idea, well yes probably.
What about those people who just like to know exactly what will be coming out of their account each month, so that they can budget effectively without wondering what the payment is goign to be month to month? Is a fixed going to be best for them? Well of course.
Have any of these people even thoguht about what the market will do? Well not really, as it is not the primary concern - and rightly so.
I would suggest that around 10% of mortgage consumers are in the position where predicting the market would be an effective way of chosing a mortgage product. Hopefully you will now understand why for the other 90% it is a dengerous game to make a decision on that basis.
As for people who dont use car insurance brokers....more fool them. For the last 8 years running my car insurance broker has beaten EVERY price comparison site by at least 20%. Granted the net might be cheaper for some, but even the "car insurance guide" on here will not find the cheapest quote for a large numebr of consumers. That kind of reiterates the point really.....there are better ways of doing things, yet the masses seem to believe they know better
They also often do not know what they are actually buying. Look in the insurance thread. I recently saw a thread where someone did not read the policy they got from Swinton, then later realised it was no good for them. At least through a broker you get a full explination of the policy...something you do not get most of the time with net sales until you have already bought the policy, and then most people still fail to read the whole document. Crazy.0 -
I would suggest that around 10% of mortgage consumers are in the position where predicting the market would be an effective way of chosing a mortgage product. Hopefully you will now understand why for the other 90% it is a dengerous game to make a decision on that basis.
I'm in the 10% camp, which is probably what blotted my thinking in trying to understand your statement(s). Thanks for the clarification.0
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