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Opinions on fixed rates please?

heart_not_head
Posts: 4 Newbie
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.
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.
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Comments
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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.0 -
Can I just ask where you found a 5 year fix at 4.24%?
That sounds like a very good deal.0 -
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?0 -
... 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.0 -
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?0 -
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 fixed0
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