Fixed vs variable, something I've been pondering

Bennifred

I for one would be really interested in which option you finally choose!:)

supersaversarah

Bennifred wrote:

I for one would be really interested in which option you finally choose!:)

Me too!

Shall we start a book on it??

tomstickland

Right, I've phoned up London & Country and told the broker that I'll be instructing him tomorrow on which option to go for. Both the fixed and variable deal have the same initial rate (4.39% vs BOE-1.1%), the same overpayment, underpayment and payment holiday options and the same fees.

Before making my final decision then I'm going to study some graphs of BOE rate versus time.

At the moment I'm probably 60-40 for fixed.

pavlovs_dog

out of curiosity tom, were You planning on overpaying each month, or saving the overpayments in a high interest account to make large annual overpayments?

tomstickland

Monthly overpayments, they calculate interest daily I think. High interest accounts pay 4% after tax, mortgage will be 4.39%. Then again, if I go variable and rates drop the it could become a 4.24% mortgage. Not forgetting that a 10% reg saver fed from a 5% savings account results in a 7.5% rate which is still 6.something% after tax.

tomstickland

I found this, which is useful: http://213.225.136.206/mfsd/iadb/FromShowColumns.asp?Travel=NIxSSx&SearchText=boe+base+rate&POINT.x=8&POINT.y=6

tomstickland

OK, Thursday 11:17am. Got to make decision. 50-50 really. Random number test time. ie: if the wrong random number comes up then I know what I really want.

tomstickland

Doing some reading now. For example: http://www.bankofengland.co.uk/monetarypolicy/decisions/decisions06.htm

free4440273

i would go for a ten year fix now. within that time rates would have doubled.

tomstickland

Well, 2 years is OK by me. I'm going to drink some premium beer tonight and see if that helps clear my mind. LOL. (Tesco's have Black Sheep Golden Ale on, craving some now).