Best 5 year fixed deal ever???

benood

Not seen this thread before - we're on a coventry +.24% lifetime tracker and haven't been offered any cheap fixed deals, not sure I'd be interested at the moment unless it was a stellar deal - say 2.49%(not going to happen I suppose).

Did you take up the offer OP?

handful

benood wrote: »

Did you take up the offer OP?

No I didn't. I was sorely tempted but decided that the decision was essentially a 3 phase one. Short term it was deinitely a no, medium term it was a yes but long term was what swung it for me. I am on a lifetime tracker of .75% above BR and didn't want to be in the situation in 5 years where I had to go onto SVR. I know this could change with increased competition but look at the difference between BR and SVR at the moment. I still wonder if I may live to regret the decision but judging from wellingtonsocks post the deal is still available. They may cut it this week as CBS only meet once a month to set all their rates and they haven't responded to the last .5% cut yet.

luckyfool

Gorgeous_George wrote: »

I don't think fixed rates will fall below 3.99%* and I don't think 3.99% will beat a tracker over 5 years. I wouldn't choose a five year deal either.

* If competition returned to the mortgage market, we might see slightly lower rates but I think competition is more than 5 years away.

GG

I would say that you are probably taking a bit of a contrarian view here.


Of course you could be right, but my sense is that most people think competition will return much sooner than 5 years (i.e. some time in 2010), and I also suspect that there is a risk that when rates go back up it could be that they rise quickly and go quite high (especially if the government is forced into printing money/quantitative easing a la that financial powerhouse, Zimbabwe).

RoxieW

I was offered same deal by kent reliance building society. Didnt take it as our rate with them is currently 2.5% and the porductthey were offering had an ERC when we would be looking to move house in 2-3 years. After reading these replies am thinking I may not have made the right choice!

MarkyMarkD

Could you not have taken a shorter-term fix from them, Rosie?

Anyway, if you have any likelihood of moving I would never advise anyone to take a fixed rate with an ERC. The risk of paying more with a variable rate is less (in most circumstances) than the financial cost of paying an ERC.

Lunar_Eclipse

handful wrote: »

No I didn't. I was sorely tempted but decided that the decision was essentially a 3 phase one.

I'm surprised by your decision, but I wouldn't have taken it either, despite it being a very competitive five year deal. Five years is too long for me, giving me a strange trapped feeling in terms of redemption, should it become necessary. A 4% ERC is outrageous!

But my main reason would be that there is a strong possibility that the base rate will fall to zero (or close enough). Making your mortgage 0.75%. If it stays at roughly this level for (only) a year, you could pay off the equivalent of approx 4 1/2 years worth of payments over that year, compared to the one year on a fixed rate of 3.99%. So that would be my personal focus; overpay, overpay, overpay whilst the rate is nominal. And if overpaying is capped, using an appropriate savings vehicles as an alternative.

Just my personal take, obviously influenced by my personal circumstances.

handful

Lunar_Eclipse wrote: »

I'm surprised by your decision, but I wouldn't have taken it either, despite it being a very competitive five year deal. Five years is too long for me, giving me a strange trapped feeling in terms of redemption, should it become necessary. A 4% ERC is outrageous!


So that would be my personal focus; overpay, overpay, overpay whilst the rate is nominal. And if overpaying is capped, using an appropriate savings vehicles as an alternative.

Hi LE

My sentiments as well, although the mortgage is portable so I could move without paying an ERC. The only problem could be if I lost my job (or wife etc) and decided to STR.

As far as overpaying is concerned, I intend doing this as soon as credit card debts wiped. (0% for another 3 months payments should see that off) I have been guilty in the past of buying first paying on 0% interest later but not doing that any more. So you can blame me for the credit crunch!!