Yikes - will interest rates stay low

steve237

thefourbennetts wrote: »

I read yesterday that the bank of england will keep interest rates low for up to 5 years. I know this doesnt mean mortgage rates will stay low but the suggestion was that there will be a bidding war for low mortgages for the next few years.

I have just fixed at a rate of 4.99 until Sept 2016. I was pretty pleased with this 7 year fix but now I am thinking we may have messed up.

We could come out of the mortgage and afford the penalties but we spent ages looking into doing the right thing at the time and now the seeds of regret are in my mind!

What do you expert guys think please?

I'm in a very similar position. I fixed last month at 5.39% for 7 years.

The talk of base rate not exceeding 2% until 2014 is just speculation - that's what I keep reminding myself!

The way I see it, it's unlikely we'll ever see the days of base rate trackers BELOW the base rate (I just came off a 2 year tracker 0.16% below base rate) and 2-3% above base rate seems to be the norm for trackers nowadays. With that in mind, the base rate only needs to rise by around 2% and I'll feel I made the right decision.

Bring on inflation!!

uzubairu

Spangled wrote: »

That's a decent rate for a decent amount of time. Don't beat yourself up on it. You have peace of mind, which in this day and age is pretty much priceless.

That's why we fixed at 4.79% for 10 years in 2006.
It has given us the ability to manage the household budget properly and also overpay. We hope to be mortgage free in 2016.

Spangled wrote: »

Seven years should be enough time to ride out the recession/deflation/hyperinflation. And if it isn't, then the economy will probably be well and truly fnucked and we'll be living off tinned rations and burning tenners for heat.

:rotfl::rotfl::rotfl::rotfl:

Ed_Zep

thefourbennetts wrote: »

I read yesterday that the bank of england will keep interest rates low for up to 5 years. I know this doesnt mean mortgage rates will stay low but the suggestion was that there will be a bidding war for low mortgages for the next few years.

I have just fixed at a rate of 4.99 until Sept 2016. I was pretty pleased with this 7 year fix but now I am thinking we may have messed up.

We could come out of the mortgage and afford the penalties but we spent ages looking into doing the right thing at the time and now the seeds of regret are in my mind!

What do you expert guys think please?

I don't think you've messed with that rate at all. If you look at interest rates historically 4.99% is quite low.

Didn't read that about the BofE keeping rates low for up to 5 years. I had heard they won't budge up by much for at least another year.

I think when rates go up they will go up quite dramatically. Then you'll be glad you fixed.

I just hope savers get a fair deal when they do go back up.