Fixed or Variable?

yorkie18

Afternoon all,

My partner and I are about to take out a new mortgage deal, as our current deal comes to an end in the next couple of months.

We've been thinking about and trying to consider which would be the best to go for, a fixed rate or variable rate? We should be able to afford either (at the current rates).

At the moment we are on a variable rate mortgage (mortgage is for £100,000) but in the current financial climate we're not sure which to go for.

Would anybody be able to offer any advice?

Any help appreciated.

Thanks in advance.

Beckymarshall07

hi yokie18 - i'm not an expert but have you considered going on a tracker for now that have better interest rate deal and usually small arrangment fee for now and then fixing later when fixed deals will hopefully be a more attractive alternative? The HSBC tracker rate we are looking at as FTB doesnt have a tie in period so you could use this as a stop gap?

Gorgeous_George

A tracker is good for lenders as it de-risks the mortgage - hence the lower arrangement fees. It's the deired win-win or as close as is possible.

With a fixed rate, there is usually a loser. What is clear is that we do not want banks to lose. See Northern Rock or Bradford & Bingley for reasons why. And, of course, we, as customers, do not want to lose.

For many reasons, I think trackers are the way ahead. I also think BofE base rates will tumble over the next year or so making them ever more desirable.

GG

quietheart

I thought they'd be more opinions on this!
We're in a similar position but are re-mortgaging and need to decide soon.
I think we'll go Tracker with Nationwide but am a bit tempted by a fixed rate. Hard to say when things are changing so fast.
Will watch this space!

beecher

It depends on your attitude to risk I suppose - I am happy to have got a 5 year fix set up, and am unlikely to now pay attention to where trackers/fixed rates go in the future. I wanted to know for sure how much I'd be paying out for the foreseeable future, but my mortgage is a lot smaller than the OPs so I have different priorities.

All I would say is that if you see a deal you're happy with, get it as soon as you can as with LIBOR rates heading upwards I expect to see a lot pulled over the next few week.s

herbiesjp

How tight is your budget?

How high would interest rates have to go before you would be in trouble with your mortgage payments?

Cat695

personally and i'm no mortgage guru, would go with fixed....IMHO i would rather know exactly what i'm paying for the next 5 10 years and not have to worry about if my mortgage is going up or not......all you have to decide is how long you want to go for

seikothrill

Go with a tracker with no early repayment penalty if there are still any around. I got mine with Woolwich.

quietheart

Nationwide are offering fixed for 5 yrs at 5.88 - does that sound any good? can't decide between that and a tracker.....

Josepina

I fixed with Nationwide, 5.75% for 3 years. Risk makes me nervous so at least with this I know where I stand, so as others have said depends on attitude to risk and how much spare cash each month in case interest rates increase.
Also as so many other things increasing like gas/elec fixed allows easier budgeting.

dimbo61

to most people a mortgage is the biggest debt they will ever have and £100,000 is not a small mortgage ( to me ! )
Knowing that the amount will remain the same for 5 or even 10 years gives you time to overpay and reduce the size of your debt.
Any deal under 6% is still very good and speading the fee over 5/10 years means its not that expensive your decision GOOD LUCK