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Fix or Stick - Advice Appreciated

Hi, been looking through dozens of threads on this and would just like your advice. I Have a current outstanding mortgage of 121000 and up until the end of July was on a fixed of 5.99 and have been overpaying by £250 for the last 5 years.
I have now fallen onto the SVR of 2.5 with Nationwide which is obviously very nice however approx 6 wks ago when the fixed rates seemed to be increasing I managed to get a rate of 4.99 with Abbey and have until the beginning of Oct to take this up.
I'm really thinking about hanging on the 2.5 rate but I'm only able to overpay by £500 a month. My house just comes in under 75%.
My question is shall I grab the 4.99 and still pay £116 less than what I was whilst on 5.99 or shall I stay on the 2.5 and hope the fixed rates fall a little again. Do people out there think rates of 4.99 with 75% LTV will come back this year ?
Many thanks in advance

Comments

  • Hi,
    I'm in the same boat as you and having pondered over this for the last 3-4 months I am going to stay on the BMR at 2.5%. Once you are on the BMR you can overpay as much as you want so any drop in your rate can be plugged in.

    The way I see it is that interest rates would have to rise by a further 2.5% over the next 3 years to move the BMR up to 5% and although it might happen, it ain't going to happen tomorrow, next week or quite possibly even next year.

    The advantage of staying with NW as well is that any overpayments you've made can be withdrawn later if you want or need to take a payment holiday.

    There are plenty of reasons for and against moving onto a fixed deal. If you need the comfort of knowing what you will have to pay each month (despite it being more) then go with the fixed. If not and you can take a gamble on rates staying low then you might want to stay on the BMR. Either way it's your call. Above is just my plan.

    Good luck.
    Sam
    Joined the track for my first lap of MFiT-T2 # 41
    Current Balance £99k
    12/12/12 Target £60k
  • bosnian
    bosnian Posts: 29 Forumite
    Thanks Samnorris 2 - I know no one has a crystal ball but my concern would be as to what the fixed rates maybe like when the BRM is at 5%.
    Does anyone know from memory or from a statistical site what fixed rates tend to be on average against the BRM.
    Thanks in advance for any replies
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