Fixed/Variable or stick to base rate?

EmmaPJs

Hi Guys,
Wondered if someone could give me some advice. We have had a mortage for 6 years now and are coming to the end of our fixed rate (6.24%) next month. My Hubbie would like to stick with the base rate and not tie ourselves into a deal, which would save us £400 per month.
Nationwide have offered us a 2 year fixed deal of 3.79% which sounds pretty good to me, but this will incur fees (£995) and not save us so much money. We also have two small extra mortages on the big one so changing companies is not really an option.
My question is do I go with the base rate, and then change to a fixed rate when the Bank of England start to increase the national interest rate, or do I go with a fixed rate now?
Any advice greatly received.
Exxx

Cannon_Fodder

As they've announced another two batches of QE - printing money - you don't have to rush. Two months at least. Then, will they change rates much, before the next election? - probably not. If a snap autumn election is announced, then it might be wise to fix then.

Personally, I'd go for 5 years if fixing.

opinions4u

If you're going on to Nationwide's 2.5% variable rate, and I'm right in saying that this tracks at BofE + 2%, then I'd go for that.

Use the money saved to build up a contingency fund which can be used to either (a) subsidise mortgage payments if rates shoot up or (b) repay capital if rates stay nice and low!

Keep your eye on the 5 year fixed market though. If it dips a little you may wish to jump in!

belfastgirl23

I'm in the same position, and I agree with the others unless you'd really be in big trouble financially if interest rates rose much below the 3.79%. I also think that a 2 yr fix is a bit pointless at the minute, my instinct tells me that in two years you'll want to be in the middle of a fixed rate rather than coming out of one...

punknzippy

hi , i am in the same position . my 3 year discount traker has just ended and has now gone up to the normal rate and going to cost me another £50 a month , had a chat with a mortgage advisor and to fix it would cost me another £100 a month on top of that . she explained that as the market is crap at the mo she couldnt say what to do for the best as in take a risk on the base rate now or fix it and pay out more a month . i personally feel that the banks are trying to scare people into fixing for a long period as i carnt see them raising the rate to much to quickly or we will be going backwards again . does anybody else think the same ??

Curly_Chick

I'm in the same position too! My discounted tracker has just finished and I am will now be on the lenders standard tracker which tracks 1.9% above the BofE base rate so my monthly payments will jump up by £100 a month. I have looked at the fixed rates around and the best I have been offered is 3.99% for 2 years with a £999 arrangment fee - this seems a bit steep and would be a further £100 a month on top of the increase I'm about to go to.

Really not sure what to do for the best..... I know that the rates are un-ussually low and will go up.....sooner or later!

My plan at the moment is: book the rate at a cost of £99 and I have it for 3 or4 months according to my broker and then when I have to sign up or lose the rate do another check to see if there is anything better at the time or if the BofE intrest rates go up. If the BofE base rate hasn't gone up and there is as good a deal or better book that rate if possible - will this give me a bad credit score? as i'm sure to book the rate the lender will do a credit check and then in a few months time if I want to do it again that will be another check!

But at the moment it will cost me £99 to book the rate and £100 extra a month to fix at the lowest fixed rate I have been offered! If I can book 2 good rates back to back at £99 each thats £200 for 6 months or sign up now and pay £600 in extra payment in the same time period!

Any comments or suggestions on the above plan would help!

Thanks