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Variable or Fixed Rate???
sandford6016
Posts: 162 Forumite
Hi,
So we've sold our place now and had an offer accepted on the one we want.
Need to get a mortgage for £195k, on a purchase price of £217k.
Been looking on moneysupermarket and seems like Britannia are coming up with the best deals for 10% deposits. However, I can't decide on the variable or fixed rate?!
Variable means a monthly payment, at the current rate, of just below £900, for a term of 2 years at the variable rate.
Fixed for 3 years means monthly payment of £1139.
I like the security of knowing exactly how much is coming out, but £900 sounds so much more attractive! What is the general feeling of the rates at the moment, do I risk it for 2 years?!
Ideas on a postcard!!
So we've sold our place now and had an offer accepted on the one we want.
Need to get a mortgage for £195k, on a purchase price of £217k.
Been looking on moneysupermarket and seems like Britannia are coming up with the best deals for 10% deposits. However, I can't decide on the variable or fixed rate?!
Variable means a monthly payment, at the current rate, of just below £900, for a term of 2 years at the variable rate.
Fixed for 3 years means monthly payment of £1139.
I like the security of knowing exactly how much is coming out, but £900 sounds so much more attractive! What is the general feeling of the rates at the moment, do I risk it for 2 years?!
Ideas on a postcard!!
:T If you don't have anything sensible to say, don't say it! :T
0
Comments
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This is not really a question anyone can answer for you, as it largely depends on your personal circumstances, can you afford the repayments if the interest rate suddenly shot back up to 5.75% - 6.00% plus more?
What I feel people forget is, the BofE brought down the rates very quickly, I would suggest they could also increase them with the same speed and we could be looking at an increase back to (and possibly) higher than before.
Having looked into this very carefully, as I'm on a tracker, I can afford my repayments up to about 11% then I would have to seriously consider looking to tie the mortgage down if necessary.
BEST ADVISE: do your maths !ORIGINAL MORTGAGE AMOUNT £106,454.00 (Started Sept 2007)
NOV 2021 O/S AMOUNT £1,694.41 OUR DEBT REDUCED BY £104,759.59 by std regular, over-payments & off-setting.
BofE +0.19% Tracker Repayment Offset Mortgage Discounted Sept 07-10 then increased to BofE +0.62% until 20270 -
That is very true.
I've just been talking to a friend at work about it. It's not a matter of not being able to afford the fixed rate payments, it's just that in my mind I'm thinking that it's £300 extra being spent on nothing! Very tricky dilemma I feel!:T If you don't have anything sensible to say, don't say it! :T0 -
The reason the BofE brought rates down so quickly towards the end of last year/beginning of this year is that they were slow to adapt to the changes in the economic climate and given the scale of the problems they were faced with it was really the only option.
Some people, myself included, think that they should have brought rates down a bit quicker, since it was painfully obvious to all where they were going to end up by January.
I don't think they'll make the same mistake on the way back up and won't be making drastic changes which could impact on sentiment within the next few years of slow economic recovery. So my vote would be a Variable rate.0 -
sandford6016 wrote: »Hi,
So we've sold our place now and had an offer accepted on the one we want.
Need to get a mortgage for £195k, on a purchase price of £217k.
Been looking on moneysupermarket and seems like Britannia are coming up with the best deals for 10% deposits. However, I can't decide on the variable or fixed rate?!
Variable means a monthly payment, at the current rate, of just below £900, for a term of 2 years at the variable rate.
Fixed for 3 years means monthly payment of £1139.
I like the security of knowing exactly how much is coming out, but £900 sounds so much more attractive! What is the general feeling of the rates at the moment, do I risk it for 2 years?!
Ideas on a postcard!!
£900 per month seems very low for a mortgage with only 10% deposit!
A word of advice for the future. Sort your mortgage out before making offers. It'll make life far less stressful in the future.
Longer term mortgage rates are only going to head one way. With a large debt could you afford a 2% to 3% increase?0 -
Im sticking with my variable 1.23% above the BoE tracker.
If the int. rate shot up to 12% I would cry but I could afford it. With that in mind Im happy to take the risk and not tie into a fixed rate.
In my opinion,
1) Rates will not increase significantly this year.
2) When they do it will be gradually, giving people time to consider locking into a reasonable fixed rate.0 -
Im sticking with my variable 1.23% above the BoE tracker.
If the int. rate shot up to 12% I would cry but I could afford it. With that in mind Im happy to take the risk and not tie into a fixed rate.
In my opinion,
1) Rates will not increase significantly this year.
2) When they do it will be gradually, giving people time to consider locking into a reasonable fixed rate.
Fixed rates have already moved significantly in the past 2 months.
Mortgage money supply is not being determined by BOE base rate but wholesale money lending rates.0 -
Thrugelmir wrote: ȣ900 per month seems very low for a mortgage with only 10% deposit!
A word of advice for the future. Sort your mortgage out before making offers. It'll make life far less stressful in the future.
Longer term mortgage rates are only going to head one way. With a large debt could you afford a 2% to 3% increase?
Thanks for your advice for the future but here's what happened:
My property has been on the market for 18 months, friday morning an offer is made which I went away to think about, 1 hour later estate agent calls to say they have just been instructed on a house in a cul de sac they know I was really interested in and it was a bargain, 2 hours later offer made and all accepted!
Getting a mortgage is not difficult.
As I have such different mortagage options available to me I thought I would get some opinions off of here before I sort it out first thing Monday!:T If you don't have anything sensible to say, don't say it! :T0 -
sandford6016 wrote: »Thanks for your advice for the future but here's what happened:
My property has been on the market for 18 months, friday morning an offer is made which I went away to think about, 1 hour later estate agent calls to say they have just been instructed on a house in a cul de sac they know I was really interested in and it was a bargain, 2 hours later offer made and all accepted!
Getting a mortgage is not difficult.
As I have such different mortagage options available to me I thought I would get some opinions off of here before I sort it out first thing Monday!
Best of luck trying to get a 90% mortgage at a competitive rate.
Making an offer is the easy part.0 -
Britannia at 4.99 variable or 6.99 fixed both for 2 years.
Hence my OP!:T If you don't have anything sensible to say, don't say it! :T0 -
sandford6016 wrote: »Britannia at 4.99 variable or 6.99 fixed both for 2 years.
Hence my OP!
Very surprised if you could get 90% at 4.99% variable.
Nationwide & NR restrict 90% mortgages primarily to existing borrowers.0
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