Will fixed rates products get better or worst

W_L

Hi,

Im trying to choose a new fixed rate product. Currently im benefiting from the standard variable rate. I ve noticed teh fixed rates products increasing.

Do I fix now or wait till the lendings gets better?

thx

wl

inspector_monkfish

could go either way i reckon
or they might just stay the same for a bit

belfastgirl23

inspector_monkfish wrote: »

could go either way i reckon
or they might just stay the same for a bit

What he's saying is no one knows so the things to consider are:

Are you in a position to take a risk in order to benefit from lower SVRs at the minute? Or do you need the security of a fix?

What is your general attitude to risk? Would being on the SVR keep you awake at night?

When I first fixed I was on 6.15, then 4.7ish, last time 5.7ish. I reckon over the time period of each one of those, I probably broke even wiht the current interest rates. Personally though if I was fixing now I'd look at 5 year rather than one or two year...but I'm not planning to fix for a while yet since I personally think rates won't go up too fast over the next year. but this is purely a personal opinion.

Dunno if that helps though

Mike1999

W_L wrote: »

Hi,

Im trying to choose a new fixed rate product. Currently im benefiting from the standard variable rate. I ve noticed teh fixed rates products increasing.

Do I fix now or wait till the lendings gets better?

thx

wl

As a rather loose explanation fixed rates are not goverened by Base Rate (0.5%) but SWAP rates and the cost to lenders for borrowing money is roughly 2% at the moment (worked out looking at SWAP rates and current products available) and as an example 5 Year SWAP rate (e.g. the rate that dictates what a 5 year fixed rate mortgage will be) has risen and is currently 3.61% - this means you need to add 2% on top to cater for the cost to the lender and you are looking at a 5.61%, 5 year fixed rate minimum.

As for your circumstances, it depends on what your SVR rate is. You could stay and take the chance that Base Rate will stay at 0.5% until the end of 2010 as predicted and enjoy a low rate for another year but can you afford to make extra payments when rates rise (and who knows how quickly) and by then fixed rates are even higher than they are now? You need to work this out - if you'd rather fix now before rates rise any higher and know where you stand then that's one thing or you take a chance of waiting a little longer, enjoying lower payments now but pay for a higher fixed rate in 6 months time.

If you want to keep track of SWAP rates, these should help:

http://www.mortgagesforbusiness.co.uk/content/BuyToLet/LandlordInformationZone/MoneyMarkets.aspx

http://www.swap-rates.com/UKSwap.html

And Inspector Monkfish here does a daily LIBOR update too :T: http://forums.moneysavingexpert.com/showthread.html?t=1602429

cheers

yelf

think of it like this:

1) what is your current monthly payment?

2) what is the lowest fixed rate you can get?

3) how much more per month will you pay if you changed to a fixed rate?

4) how long do you think it will take for your current variable rate to reach the proosed fixed rate?

5) over this period how much extra would you have paid by being fixed in?

(off coure some the time the SVR reaches curent ficed rates (depedning on LTVS etc) it may cost more to fic at that point).

My SVR is 2.25 and I sont see me fixing for at least 2 years.