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To fix or not to fix
chirpchirp
Posts: 1,983 Forumite
I've just finished a fixed rate and I'm really pleased to finally be on a tracker paying .99% above the BOE. Today I opened an offer letter from my lender offering me a long term fixed deal of upto 20 years @ 4.79% or 4.99% dependent on my LTV.
There are no reservation fees, no product fees and no tie in period so no early repayment charges. After the 20 years I would move to their SVR which is currently 5.99%.
I don't know what to do. I would really like to take advantage of the low interest tracker rate as my mortgage is so high and I was looking forward to paying some of it off. I keep thinking that the mortgage company must think interest rates will stay low for some time for them to be gambling and offering a low rate for such a long time. Obviously the more I can pay off now the lower the capital will be and hence the lower the interest will be when the rate does go up.
If I pay the fixed rate amount I won't be able to pay much off the capital and hence will be paying more in interest rates for a long time. However if interest rates increase rapidly then I will have problems if I'm not in a fixed rate.
Whatever I do I'm bound to have some regrets. What would you do?
There are no reservation fees, no product fees and no tie in period so no early repayment charges. After the 20 years I would move to their SVR which is currently 5.99%.
I don't know what to do. I would really like to take advantage of the low interest tracker rate as my mortgage is so high and I was looking forward to paying some of it off. I keep thinking that the mortgage company must think interest rates will stay low for some time for them to be gambling and offering a low rate for such a long time. Obviously the more I can pay off now the lower the capital will be and hence the lower the interest will be when the rate does go up.
If I pay the fixed rate amount I won't be able to pay much off the capital and hence will be paying more in interest rates for a long time. However if interest rates increase rapidly then I will have problems if I'm not in a fixed rate.
Whatever I do I'm bound to have some regrets. What would you do?
0
Comments
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How long has your mortage to run?
No early redemption fees?0 -
My mortgage is officially 18 years but as none of it has been paid off and the repayment vehicle won't cover it, it's more likely to be 30 years!0
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chirpchirp wrote: »My mortgage is officially 18 years but as none of it has been paid off and the repayment vehicle won't cover it, it's more likely to be 30 years!
Personally I would fix on the deal. For an extended period without penalties it gives you piece of mind.
Any spare cash you get can be saved into Cash Isa's and then used to repay the mortgage.
Variable interest rates will rise over the next 18 months. Quite possibly sharply and steeply.0 -
always go for the fixedMax Millionaire191 007:T :T :T :T :T :T :T :T :T :T0
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Just out of interest, who is the lender?0
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