One quick question guys

dean_ham

Think im being a bit dull but i just cant find the answer.

Say i take a fixed rate mortgage out at 3.5% fixed for 2 years - then it reverts to 4.2% APR after the deal ends.

Does this mean that 4.2% APR means roughly 3% above the BOE base rate.

Which means when the deal ends in 2 years and the BOE base rate is at say 4% will i be paying 7%.

How do you know roughly what the APR will be in 2 years time.

For example i can get a mortgage for 3.5% fixed for 2 years then it reverts to 4.2% APR TERM,

or 4.2 fixed for 2 years, then reverts to 3% APR term. This would be better in the long run wouldnt it if i had for a number of years?

Thanks for helping me!

Dean

Rolandtheroadie

The 4.2% is their standard variable rate at this time and if your fixed rate ended today, thats the rate you would go onto.
2 years from now, if their standard variable rate is 4%, thats what you would go onto. It's not tied to BOE base rate, your mortgage provider decides what this is.

dean_ham

Ok thanks for the quick reply, so its just a matter of pot luck really what you pick.

I.e i could pick a mortgage of (4.2% APR thereafter) over a 3%.

But when the 2 year deals end the 4.2% could be there or there abouts but the 3% could be 9% in 2 years time?

Robert_Sterling_3

dean_ham wrote: »

How do you know roughly what the APR will be in 2 years time.
Dean

You do not know.

Robert_Sterling_3

In 1980 it was 15%