Should I tie into a fixed rate now or wait?

Efi_2

Hi,

I am currently on a variable rate but would feel safer on a fixed rate. Do you think now is a good time to tie in for 2/3 years?

I have a rate through a mortgage adviser with the Abbey at 4.59% for 3 years with no arrangement fee. My mortgage payments will go up approximately £45 per month.

Should I wait a bit longer?

Thanks for any advice.

Efi

opinions4u

I am currently on a variable rate but would feel safer on a fixed rate

Fix now.

Don't lose sleep if it turns out you'd have got a better rate by waiting.

Nobody really knows what the future holds, but you are uncomfortable with what you have.

We can all speculate what may or may not happen with interest rates. Fixed costs may come down, they may rise. Variable rates may stay low. They may shoot up and leave you with a big jump in payments. We don't know.

But you want peace of mind. So go take it.

Peelerfart

As opinions4u has said , if your worried, fix .

If not then continue on your SVR as I assume it's lower . All the indications are that the low rate may continue a while longer yet.

But like all this stuff, no-one really knows

geoffky

i would fix for as long as you can...then you know your costs upfront before inflaton runs away..

kriss_boy

For me the rate Im getting is only 1.4% from the lloyds tsb... so to fix at 4 or 5% is a big jump.

Does this mean you guys think the rate will jump up significantly beyond 5% and so quickly that you are considering taking 4% today?

The rate could stay at 1% well into next year.

beecher

Much depends on your own attitude to risk, your ability to cope with rising rates, and your LTV. Size of mortgage makes a difference to. If your LTV is above 60% then your choices will be different from someone with a low LTV. In saying that, my LTV is 30% and I've fixed for 4 years and got a deal which I think will prove to be the lowest available for a while.

kriss_boy

Our house cost 84K just over a year ago, its been valued by a couple of estate agents this month at 85-90K, fewf.

Our deposit was 6K and we have paid off a further 1K. We are now overpaying it more and by the end of the year we should have paid off at least a further 4 or 5K.

Im not really worried about the rate in the sense that I know we could afford to pay more towards it.

At present we only put about 20% of our take home wages to it which is pretty low.

We intend to beef the overpayments up this summer. Im begging my girlfriend to agree to boost it up to £1000 per month (which at present is only £100 interest and £900 straight into reducing the outstanding.)

Shes a bit weary of this though! pfft! Wants to go to austrailia in November women.

patchwork_cat

Kriss I am no expert, but at present am I correct in thinking that you owe 77K. At even the highest valuation of 90K then your loan to value is 85%. The best deals are at 60% with another level at 75%, so I would advise that you chuck money at your mortgage whilst the rates are low so that you get the best deal when you have to fix as your LTV will be much better. Australia will still be there next year, but you may not get such an oppurtunity to put your finances on a good footing!

ToMonkey

I owe 67k and house just valued at 130k but that for me is low however my fixed rate is 4.9% till 2020.

I am very happy with that. If you want peace of mind fix for as long as possible. Most people seem to assume the rate will still be low for another couple of years but the fixed deals seem to be creeping up with the LTV dropping from 80 to 70 to 60 so the banks probably feel like that too.

In the end it all comes down to preference but me I don't like to gamble as normally I lose.

kriss_boy

patchwork_cat wrote: »

Kriss I am no expert, but at present am I correct in thinking that you owe 77K. At even the highest valuation of 90K then your loan to value is 85%. The best deals are at 60% with another level at 75%, so I would advise that you chuck money at your mortgage whilst the rates are low so that you get the best deal when you have to fix as your LTV will be much better. Australia will still be there next year, but you may not get such an oppurtunity to put your finances on a good footing!

Yes I think theres probably about 78K left on the mortgage.

If the rate stays as low as it is then by xmas it will be down to about 75K. If we up the repayments to 700, or possibly £1000 and the rate remains low then by xmas it could be down 72K...

We both get paid 4 weekly so later in the year we both get 2 pays within the space of one month which is also handy.

We are definately increasing the overpayments up another couple of hundred but Im working on the girlfriend to agree something bolder.

Her sisters moved to Aus so shes desperate to go out and visit her in November... which kinda ruins my overpayment plan!

Peelerfart

kriss_boy wrote: »

We are definately increasing the overpayments up another couple of hundred but Im working on the girlfriend to agree something bolder.

What exactly do you have in mind Kriss ??? :rotfl: :beer: