Opinions on fixed rates please?

heart_not_head

Does anyone know if historically five year fixed rates have ever been offered at below 4%? Briefly at the start of the year HSBC offered 3.99 but withdrew it within weeks.

Easy enough to find base rate history but harder to know history of lenders rates - I just wondered whether anyone recalls lower deals than this in the past.

Im also interested to know if anyone thinks fixing for five years at 4.24% is a mistake in the face of low rates expected to be maintained for 12m.

The advantages I see of fixing - I cant predict when rates will go up, but popular opinion on QE is that it will eventually stoke inflation, and ultimately taxes will have to rise significantly - meaning less income, higher mortgage payments.

But its a tough call when on two year deals I could start paying half that level of interest. I have a £120k loan on sole income hence Im a bit risk averse. I know there have been other posts re fixing or not, but this is about the biggest finanacial decision I have to make and would appreciate other points of view.

Thank you.

RufusA

heart_not_head wrote: »

Does anyone know if historically five year fixed rates have ever been offered at below 4%? Briefly at the start of the year HSBC offered 3.99 but withdrew it within weeks.

Im also interested to know if anyone thinks fixing for five years at 4.24% is a mistake in the face of low rates expected to be maintained for 12m.

I can't find any specific details of the lowest 5 year fixed rates historically. However there has typically been a spread of no more than 0.5% - 1% between the previous months 5 year swap rates, and the fixed rates. 5 year swaps hit a historic low, so I imagine that if there was anything lower than 3.99%, it came with enough fees / conditions to maintain the spread.

I'm in a similar position as you, and provided you are comfortable with 4.24% and you are not going to be kicking yourself every month for the next 5 years, or need to move in that time, go for it.

With various "what if" scenarios and a complex spreadsheet, I estimated that over 5 years a fixed would likely cost me a similar amount to the available trackers, assuming interest rates will rise over 5 years back to 4 - 6% levels.

If I chose the fixed, and got it wrong, the worst I would have lost is a little smugness in not selecting the cheapest product.

If I chose the tracker, and got it wrong, the worst I could lose is the house!

I chose fixed!

If at the time I could have found a cheaper tracker or fixed were more expensive the outcome would probably have been different.

I'm now going to willfully try and ignore base rates for the next five years!

Rufus.

firsttimetom

Can I just ask where you found a 5 year fix at 4.24%?

That sounds like a very good deal.

b0rker

Does anyone know what interest rates were on offer for a 5 year fixed on an 85% LTV at the end of 2007?

Would you have got a 5.99% deal on an 85% LTV for example?

RufusA

b0rker wrote: »

... 5 year fixed on an 85% LTV at the end of 2007?..Would you have got a 5.99% deal?

Easily! For example in Nov 2007, Nationwide were offering:

http://www.nationwide.co.uk/mediacentre/PressRelease_last.asp?ID=1111

90% LTV at 5.63% with a £499 booking fee!

Rufus.

b0rker

RufusA wrote: »

Easily! For example in Nov 2007, Nationwide were offering:

http://www.nationwide.co.uk/mediacentre/PressRelease_last.asp?ID=1111

90% LTV at 5.63% with a £499 booking fee!

Rufus.

Interesting link thanks.

We are looking at a 5 year fixed at 5.99% on an 85% LTV with Natwest. £800 booking fee.

Obviously there were better deals about when there was more money in the system and the banks were not profiteering.

I still see 5.99% as historically low for a 5 year fixed at 85% LTV though.

We are on the Northern Rock 4.78 SVR just now and we are not really saving much despite lacking the peace of mind of a fix.

A lot of people are suggesting that the BOE rate will stay at 0.5% for another year. Will Libor stay at the same rate though?

Surely that is more relevant to fixed rates?

TighterThanTwoCoatsOfPain

heart_not_head wrote: »

Im also interested to know if anyone thinks fixing for five years at 4.24% is a mistake .....


....

on sole income hence Im a bit risk averse..

Reckon you answered your own question in a round about way...

I fixed