fix or wait?

trixie73

last week i was offered a fixed rate for 5yr at 6.39% by the halifax. should i take this offer now or do you think fixed rates will drop given the interest rate cut today. halifax have already said that they are cutting their svr to 6.5% from 1st nov.

waynedance

theres your answer, wait till the fixed rate comes down.

trixie73

waynedance wrote: »

theres your answer, wait till the fixed rate comes down.

so do you think they will bring the fixed rates down aswell then.

Locoblade

That isn't really the answer no. Fixed rate deals are far more closely linked to the "LIBOR" rates, which are the rates at which banks lend to each other in bulk, they're not really linked to what the BoE base rate is doing. Because of the banking crisis, banks have been understandably cautious about lending to each other in recent weeks, so LIBOR rates were if anything going up, hence the withdrawl / raising of quite a few fixed rates deals over that period. Im no expert and don't follow this too closely, but I wouldn't expect any significant fixed rate drops to happen because of this.

The drop does mean that trackers are now very competitive though, if you get a tracker at +0.5% for example, then you'll be on a 5% rate which is significantly lower than any (reasonably priced) fixed rate deals at the moment.