To BT or not to BT now interest rate is dropping

mustoep

Hi! This is my first post so I hope I've come to the right place.

Last year, at the brilliant suggestion of this site, I took out an MBNA card with a 0% BT then took up their offer of a BT into my current account. This means I have roughly £4300 currently offsetting against my Woolwich mortgage. At the time I paid the 3% fee, but my mortgage interest was 6.7% so I figured I was winning. The 0% period is up next month and I was about to transfer it to Capital One or Barclaycard for another 11-14 months (still working out whether to pay 2.5% or 3%) but my question is.....is this going to be pointless now if interest rates drop further, or is it likely that they will take a few months to reach a level which would equate to less than 2.5% pa over the next 12 months? The interest rate on my mortgage now is 5.95% but with the 1.5% rate cut announced today am I potentially better off taking out the shorter BT term at 2.5% until Nov 09, or repaying the whole amount back now from my current account? Any advice appreciated.

Thanks

Pam

Shimrod

As far as I'm concerned, it's the end of stoozing for now. The gains are so marginal (I'm on a tracker mortgage at +0.95% over base rate) that it's time for a break. And I haven't done the maths, but I suspect if you have to pay back 3% of the balance each month you probably won't even break even.

mustoep

Thanks for your advice. I appreciate it.

Pam

Locoblade

Shimrod wrote: »

As far as I'm concerned, it's the end of stoozing for now. The gains are so marginal (I'm on a tracker mortgage at +0.95% over base rate) that it's time for a break. And I haven't done the maths, but I suspect if you have to pay back 3% of the balance each month you probably won't even break even.

I'm in a similar situation with a +0.49% tracker so my planned toe dip into stoozing en-mass will be on hold for a while, but its still worth slow stoozing isnt it, as long as you just pay off the card at the end of the 0%? I know its not mega bucks being saved that way, but its a clear profit rather than having to contend with BT fees etc eroding the advantage.