Inflation - Interest Rates

Bean_69_99

Just to keep this going (and trying to ignore all the normal forum crap)

Chucky and mbga9pgf...

Regardless of different answers based on 'factual data'...

How reliable do either of you expect your predictions to be, considering the numerous varying factors that ahve such a big influence. Each time period we use for comparison surely differs so much in terms of political issues / forces, income, inflation, nature of borrowing, nature of saving etc etc etc.

I'm all new to MSE forums and currently weighing up a choice of 4.99% fixed for 3 years, or 1.89% BR tracker for 3 years.

Trying to fathom a theory that i can justify to me and the Mrs over one or the other from past data, seems like fishing in the dark in sunglasses to me so far.

Appreciate any input.

bluey890

Bean_69_99 wrote: »

Just to keep this going (and trying to ignore all the normal forum crap)

Very noble of you old Bean.

Bean_69_99

well its just words, been on car forums and it doesnt matter if its recipes, cars, money or stamps. Every forum as the same issues.

Im hardly noble, i jst want some answers! P

Thrugelmir

Bean_69_99 wrote: »

Just to keep this going (and trying to ignore all the normal forum crap)

Chucky and mbga9pgf...

Regardless of different answers based on 'factual data'...

How reliable do either of you expect your predictions to be, considering the numerous varying factors that ahve such a big influence. Each time period we use for comparison surely differs so much in terms of political issues / forces, income, inflation, nature of borrowing, nature of saving etc etc etc.

I'm all new to MSE forums and currently weighing up a choice of 4.99% fixed for 3 years, or 1.89% BR tracker for 3 years.

Trying to fathom a theory that i can justify to me and the Mrs over one or the other from past data, seems like fishing in the dark in sunglasses to me so far.

Appreciate any input.

What are the product fees payable?

chucky

Bean_69_99 wrote: »

Regardless of different answers based on 'factual data'...

i've taken out a 5 year fix at 4.69% in Feb with Halifax.

as for buying property depends on your circumstances and what your local property prices are like and which way there heading

Thrugelmir

Bean_69_99 wrote: »

I'm all new to MSE forums and currently weighing up a choice of 4.99% fixed for 3 years, or 1.89% BR tracker for 3 years.


Appreciate any input.

Depends on your view of interest rates.

If rates didn't change in that period, and your mortgage has 25 years left to run.

You could overpay the tracker by a minimum £1.41 per month per thousand owed. By this I mean make repayments on the tracker at the same level as the fixed rate. This would give you a cushion if rates were to rise.

Reducing the capital every month would reduce interest further if the interest was calculated on a monthly basis. As interest saves interest, compounding is the key to sucess. An often forgotten fact.

Bean_69_99

well i dont want to spam this thread with too much... ive started a thread in the Mortgages section..

Our choice at the minute is (On 100k, 25 years, repayment)
We can get the mortgage and have 25k deposit.

For the 75% ltv... we're looking at either 4.99 fixed for 3, or BR +1.89 for 3, both have 995 product fee. Tracker is Co-op Bank, Fixed is Abbey.

Forgetting the mortgages per say, as the rates go, i know im saving £100 a month being on the tracker @2.39% againstthe fixed at 4.99. I will only be up to paying the same (as makes no difference) when the BR is 3% (simples)

Ive got scenarios all 'excel'ed up... just trying to predict how long were going to be 'making/saving' against the fixed before it goes up...

Weve picked 3 years as ideal term as were FTB and may not be buying a house for life with the money weve got and financial situation.

I think 5 years would be an option, if we could port the mortgage, its jst getting a rate that im confident with!

EDIT: we're swaying with Co-op as interest is daily, Abbey, is yearly. We had discussed the overpaying option and to be honest i think it may be better on the tracker as it woudl give us some breathing space when we first move in, and assuming we settle finances bills etc in a short enough period to enable us to start overpaying etc, the rates have to go up past 5% after 10 months @ 2.39% before our three year spend starts to equalise and overtake the Fixed rate. I appreciate the importance of interest rate calculation period, and i agree, a much uinderestimated factor.

Thrugelmir

Bean_69_99 wrote: »

well i dont want to spam this thread with too much... ive started a thread in the Mortgages section..

Our choice at the minute is (On 100k, 25 years, repayment)
We can get the mortgage and have 25k deposit.

For the 75% ltv... we're looking at either 4.99 fixed for 3, or BR +1.89 for 3, both have 995 product fee. Tracker is Co-op Bank, Fixed is Abbey.

Forgetting the mortgages per say, as the rates go, i know im saving £100 a month being on the tracker @2.39% againstthe fixed at 4.99. I will only be up to paying the same (as makes no difference) when the BR is 3% (simples)

Ive got scenarios all 'excel'ed up... just trying to predict how long were going to be 'making/saving' against the fixed before it goes up...

Weve picked 3 years as ideal term as were FTB and may not be buying a house for life with the money weve got and financial situation.

I think 5 years would be an option, if we could port the mortgage, its jst getting a rate that im confident with!

Getting a cheaper mortgage is not saving money. Borrowed money in any form costs money.

Overpay on the tracker mortgage as much as you can. Whether you fix for 3 or 5 years is fairly irrelevant. As you would have repaid little capital in that time. Interest rates are bound to be much higher further into the distance. That could still catch you out.

chucky

Thrugelmir wrote: »

Overpay on the tracker mortgage as much as you can. Whether you fix for 3 or 5 years is fairly irrelevant. As you would have repaid little capital in that time. Interest rates are bound to be much higher further into the distance. That could still catch you out.

agree with this - overpay to clear as much debt as quickly as possible.
overpaying in the first 5 years is crucial. rates will go up at some point in the future, take advantage of the current rates that are at historical lows.

the spreadsheet calculator in the mortgages section is an excellent tool to get an idea on overpaying.

Bean_69_99

ok, will have a look.... thanks.