Fixed Or Variable Rate Mortgage?????

scottburke

I know everybody s situation is different. so advice on this question would depend on our situation. but me and my wife our just arranging a mortgage with the bank. and wondering if to do a fixed rate mortgage or a variable? i ve read alot of articles about the british economy slowing down and a possible recession over the next few months/years but how will this affect interest rates?? prob abit of a stupid question but are they likley to be cut or increassed to stop the rot?? (wish i d paid attention now in economics at school now:rolleyes:)

just didnt want to fix the mortgage then see the rates fall........

Wutang_2

why would rates falling worry you if you were on a fixed rate? Why not consider what is affordable and go for it...fix it seems like a good idea I think as, as you point out - possible recession - there are turbulent times ahead.

GDB2222

If there's a recession, interest rates will quite probably come down. However, at least in theory, fixed rates should already anticipate this.

clobber_2

Another confounding factor is the mortgage rates are based on LIBOR, which of late hasn't followed the BoE base rate particularly closely. So BoE could go up or down, or LIBOR could go up or down, and the two of them interact in a subtle and unpredictable way.

Bung base rate trackers into the mix and noone really knows what to do for the best.

scottburke

clobber wrote: »

Another confounding factor is the mortgage rates are based on LIBOR, which of late hasn't followed the BoE base rate particularly closely. So BoE could go up or down, or LIBOR could go up or down, and the two of them interact in a subtle and unpredictable way.

Bung base rate trackers into the mix and noone really knows what to do for the best.

thanks but even more confused than i were to start with now:o

barnaby-bear

scottburke wrote: »

I know everybody s situation is different. so advice on this question would depend on our situation. but me and my wife our just arranging a mortgage with the bank. and wondering if to do a fixed rate mortgage or a variable? i ve read alot of articles about the british economy slowing down and a possible recession over the next few months/years but how will this affect interest rates?? prob abit of a stupid question but are they likley to be cut or increassed to stop the rot?? (wish i d paid attention now in economics at school now:rolleyes:)

just didnt want to fix the mortgage then see the rates fall........

Look at the fees over the term of the fixed - 1000 in fees on a two year fixed is over 40 a month on the mortgage, a lot of trackers have no fees - a BoE tracker is sometimes different to a variable a lenders standard variable may not track BoE rate changes