Mortgage explanation pleeeease?

KellsBells

Hi all,

My mortgage is currently on a fixed rate at 7.19 and the lady at GE has just advised me that the fixed rate ends 25/10/09.
She explained that depending on what happens to the base rate my payments could potentially go up or down.

I get that, but not really sure how the base rate is tracking at the mo and what the forecast is and what I should expect. Can anyone put it into simple terms for me?...

Thanks in anticipation.xx

pjcox2005

Obviously depends on the exact details of your mortgage, what percentage it would be above base rate etc, but simple summary is:

Base rate currently very low at 0.5% (I think lowest it's ever been).

Common theory (although basically a guess) is it will stay low for a while longer yet whilst the economy tries to recover. Perhaps another 6 months (but that's my guess only).

I would imagine (and again this is a personal opinion) that it would rise back up to previous recent levels (i.e. 4/5%) after that or potentially higher.

If I was hazarding a guess I would expect your mortgage to drop intially from 7.19 but could rise quite quickly given that you'll be coming off your current fixed rate at the end of October.

Best advice is to consult a mortgage broker closer to the time so you can work out the best position for your circumstances.

Mrs_Bumble

Did the person at GE say that your mortgage would revert to their Standard Variable rate or bank base rate plus xyz%?

Is remortgaging away from GE at the end of the fixed rate an option?