5.99% 2 year Fixed YBS or 4.99% Variable

mrweetabix

Hello

Its my first post and i am after a bit of advice please.

Have 23 years left on a 137k mortgage - house value of 150k. So about 10% LTV.

YBS are offering us 5.99% fixed for 2 years or i could go on their SVR of 4.99%

Just wondering what peoples thoughts are?

mrweetabix

Sorry if this isn't an exciting question but is there a chance the variable rate could go above 5.99%?????

CloudCuckooLand

Just over a year ago the base rate was 5%. No-one can guarantee that in a year it won't be back there.

Potentially adding 4.5% to the SVR.

Take the Fixed Rate.

Spangled

Personally I don't see the point in fixing for just two years. Although it's not guaranteed, many commentators and pundits reckon interest rates will start to rise next year and into 2011 - so you could be faced with a much higher base rate just as you come off your fix.

If I was looking to fix, I'd be looking for a five-year deal minimum. But of course, it depends on your individual circumstances - is this your "home for life"? Are you likely to want to relocate in the next few years? Planning on having kids? How stable is your job? What is your income to house value multiple? etc etc

Will YBS offer you a longer fix?

One other point - 5.99% seems on the high side for a fix. I'm pretty sure there are deals out there around 5% even with just a 10% deposit/equity (although I haven't been looking for a mortgage for myself recently so I stand to be corrected).

Rob71

Just stay put for the next 6 months - there's little point in fixing or paying transfer fees at the moment, when no-one (honestly) knows what's going to happen.

I take it you're with YBS and have just come off a fixed period?

You're under no obligation to do anything just yet - review it in a few months, and in the meantime enjoy the lower payments of the SVR.

One other thing: banks tend to be more competitive in spring for some reason...

mrweetabix

How do the banks work out their SVR - is it X% on top of the Bank of England Base rate?

Are all SVR different according to the bank? Or is it a set figure?

rsykes2000

mrweetabix wrote: »

How do the banks work out their SVR - is it X% on top of the Bank of England Base rate?

Are all SVR different according to the bank? Or is it a set figure?

All banks work out their SVR using their own criteria, no set rules for all institutions. Eg HSBC is currently 3.94, Nationwide 3.99, Leeds Building Society 5.49 (no reason I picked these particular ones, just ones I walk past in town).

mrweetabix

Does anybody know what the highest SVR has been in the past 5 years?

CloudCuckooLand

There have been people dropping onto 7%, 8% even 9% in threads on here, despite 0.5% Base Rate...the banks are pretty much a law unto themselves at the moment.