New Mortgage deal - Advice please

FamilyTree_2

Hi All,

I’ve never posted on the Mortgage Board before so I hope you all don’t mind giving me some advice, sorry if the posts a bit long.

We have a fixed deal with First Active that is about to come to an end. 5.85% £650 a month.

They have offered us another deal fixed for 2yrs at 3.65% with a £699 arrangement fee, this would be £520 a month. No hassle no paperwork just a straight switch.

Alternatively we could let our fix run out and automatically go on to the SVR of 1.6% at £409 per month.

Now my DH seems to be erring towards the lowest interest rate but I’m not sure if that is the wisest choice. He seems to think that if we go on the standard variable rate and it begins to rise then we can just snap up another fixed deal and that we wouldn’t be any worse off than we are now but I’m not so sure. Is it unlikely that we would get such a good offer if interest rates begin to rise.

Also we had been planning on doing some work to the house and thought that we would take £5000 equity from it to do this, however that involves going through the whole application again and I’m worried that in this climate if we are refused it then we would loose out on the original straight switch deal.

So I guess what I’m asking for your thoughts on are

A Is the new fixed rate a good deal?
B Would I be better taking a gamble on the SVR?
C Would I still get the fixed rate offered if I’m rejected for the extra loan?


Thanking you all in advance.