Fix at a low rate or gamble .....

steveksullivan

I have a Northern Rock bond maturing on 20th Jan.

Currently can get Chelsea fix at 4.55% - however whats that likely to do after the BOE meeting on the 8th .....????

OR I can 'reserve' a rate by staying with NR for 1YR at 3.75%

Whet would you lot do ?

triplea35

I have no experience of The Chelsea but have applied online for other fixed rates recently. After applying the rates were withdrawn but my applications were honored and I was given quite a bit of time to send the deposit in. These were with HBOS and Saga.
My suggestion would be to apply online with The Chelsea before the 8th as rates are likely to fall further. If the rates drop just give them a quick ring to comfirm the rate will be honored and get it posted to them asap.

Dooooooooooooooonut

What happens if interest rates go to 15%? Your upside from gambling with rates going lower is nowhere near as bad as your potential downside.

macca64

Yes and it's likely interest rates will hit 15% in less than 12 months :rotfl: More likely interest rates will drop again then stay low for a while before rising at the back end of 2009.

Hungerdunger

From what I can see, the 4.55% rate is for a six-month bond, so even if it was still open on 20th January, you'd be looking for a new home for your money in July. My gut feeling is that interest rates in July will probably be lower than they currently are, so it might be best to stick to at least a one-year bond.

nilrem_2

steveksullivan wrote: »

I have a Northern Rock bond maturing on 20th Jan.

Currently can get Chelsea fix at 4.55% - however whats that likely to do after the BOE meeting on the 8th .....????

OR I can 'reserve' a rate by staying with NR for 1YR at 3.75%

Personally I would try to get at least a 12 months Fixed rate, in 6 months you will have the same problem again and any 'better' rate you get now will be negated when you have to do the next 6 months at an even lower rate.

Have you considered the Chelsea 12 month Fixed rate @ 4.40%? Or the Nationwide 2 year fixed at 3.85% - 4.10% depending on deposit?

udydudy

Dooooooooooooooonut wrote: »

What happens if interest rates go to 15%? Your upside from gambling with rates going lower is nowhere near as bad as your potential downside.

Very simple if rates were to go to 15% close your fixed rate product. the maximum penalty AFAIK is 180 days interest. so you lose 50% of your annual interest. then open the 15% product. but I guess Doooooooooonut was meaning to type 1.5% and missed the "."!!!:D

its more likely to go to 1.5% than 15% at the moment. but the way things are going it will not be too long before we get hit by a triple whammy of higher taxes, VAT and interest rates.

So watch out, before long its going to be a different ball game

Dooooooooooooooonut

No, I was talking about 15%. Of course it is more likely to go to 1.5% but the 15% scenario is a lot more damaging