Should I fix for 2 or 5 years?

Ian_Griffiths_Halifax

JFergy wrote: »

Yeh i thought so, just thought i had missed a trick, lol. I thought at the end of the 2 year fix LTV doesn't get taken into consideration,and you are automatically put onto a tracker? (in this case a +3% BOE)

Thanks for your time with this bud. Its good to get a second opinion on things

If the Base Rate is back up to 5% (which is a low historic rate) then you'd be going up to an interest rate of 5% + 3%, so 8% total in possibly just 2 years time. Is it worth the risk?

getmore4less

beecher wrote: »

Usually not put on a tracker at the end of a deal - it is usually the SVR.

A lot of deals have base tracker follow on these days.

Ian_Griffiths_Halifax

getmore4less wrote: »

A lot of deals have base tracker follow on these days.

Or even a SVR which is linked to the Base Rate. Some lenders may put in their offers something along the lines of:

At the end of your Fixed Rate Period you will revert to our Standard Variable Rate, which is guaranteed to be no more than 3% above the Bank of England Base Rate.

JFergy

Ian_Griffiths_Halifax wrote: »

If the Base Rate is back up to 5% (which is a low historic rate) then you'd be going up to an interest rate of 5% + 3%, so 8% total in possibly just 2 years time. Is it worth the risk?

This is the main argument im having with myself tbh...

0-2 Years Interest RateBOE Base Rate (2-5 Years)Interest rate (on mortgage)Monthly Payment 0-2 YearsMonthly Payment 2-5 YearsPotential Monthly SavingPotential Total Saving0-2 Years2-5 Years6.39%1.00%4.00%£820.94£609.25£6.41£218.09£7,505.226.39%1.50%4.50%£820.94£651.20£6.41£176.15£5,995.276.39%2.00%5.00%£820.94£694.45£6.41£132.90£4,438.326.39%2.50%5.50%£820.94£738.93£6.41£88.42£2,836.906.39%3.00%6.00%£820.94£784.58£6.41£42.77£1,193.646.39%3.50%6.50%£820.94£831.31£6.41-£3.96-£488.826.39%4.00%7.00%£820.94£879.06£6.41-£51.71-£2,207.816.39%4.50%7.50%£820.94£927.75£6.41-£100.40-£3,960.696.39%5.00%8.00%£820.94£977.31£6.41-£149.96-£5,744.886.39%5.50%8.50%£820.94£1,027.67£6.41-£200.32-£7,557.876.39%6.00%9.00%£820.94£1,078.77£6.41-£251.42-£9,397.24

Squish_21

I'd go for the 5 year as i'd like to be safe in the knowledge knowing exactly what im paying each month.

JFergy

God that didnt work, anybody know how to copy an excel sheet over?

beecher

getmore4less wrote: »

A lot of deals have base tracker follow on these days.

I didn't realise that - ta. The OP says that he's guessing that it is a tracker though - needs to check it up I think, esp as Natwest's SVR is 4%.

Fliss_M

Ian_Griffiths_Halifax wrote: »

If the Base Rate is back up to 5% (which is a low historic rate) then you'd be going up to an interest rate of 5% + 3%, so 8% total in possibly just 2 years time. Is it worth the risk?

How much baring does historic have when our economy has never been so dependent on house prices and with the BOE controling the rate? (Honest question)

Ian_Griffiths_Halifax

JFergy wrote: »

This is the main argument im having with myself tbh...

0-2 Years Interest RateBOE Base Rate (2-5 Years)Interest rate (on mortgage)Monthly Payment 0-2 YearsMonthly Payment 2-5 YearsPotential Monthly SavingPotential Total Saving0-2 Years2-5 Years6.39%1.00%4.00%£820.94£609.25£6.41£218.09£7,505.226.39%1.50%4.50%£820.94£651.20£6.41£176.15£5,995.276.39%2.00%5.00%£820.94£694.45£6.41£132.90£4,438.326.39%2.50%5.50%£820.94£738.93£6.41£88.42£2,836.906.39%3.00%6.00%£820.94£784.58£6.41£42.77£1,193.646.39%3.50%6.50%£820.94£831.31£6.41-£3.96-£488.826.39%4.00%7.00%£820.94£879.06£6.41-£51.71-£2,207.816.39%4.50%7.50%£820.94£927.75£6.41-£100.40-£3,960.696.39%5.00%8.00%£820.94£977.31£6.41-£149.96-£5,744.886.39%5.50%8.50%£820.94£1,027.67£6.41-£200.32-£7,557.876.39%6.00%9.00%£820.94£1,078.77£6.41-£251.42-£9,397.24

If I had that lot on my mind, I'd not sleep at night!

You are worrying about something you don't need to worry about. The decision is staring you in the face.

Ian_Griffiths_Halifax

Fliss_M wrote: »

How much baring does historic have when our economy has never been so dependent on house prices and with the BOE controling the rate? (Honest question)

In a basic explanation, historically interest rates have been used to steer inflation. If people have been spending too much money (high inflation) then they put rates up to reduce peoples spending. If people aren't spending enough (low growth and errrrm credit crunches) they drop them to stop people spending.

Some Economist may have a more detailed explanation, but I find this works with clients.

At the end of the day, we import a high percentage of what we use and the cost of these imports are rising due to the drop in the value of the pound. Rates will rise to help combat this.

If anybody has a better, simpler answer than that, then I'd welcome it.