Will there ever be a situation.....

rothers

....where it would be sensible, and cheaper, for me to fix?

I'm currently on a lifetime tracker with the Woolwich at 0.17% above the Barclays Base Rate (assuming that this always follows the BoEBR)?

Obviously, as interest rates rise so will the fixed rate deals.

I can't see any situation where I will need to change my mortgage however, I may be badly mistaken!

If interest rates went up to 6% surely I won't get a fix for anything like 6.17% ?? Should rates continue to rise and I fixed, would they rise quickly enough for me to benefit before the fixed rate period ended??

As I have said, in my view I don't think that I will change mortgage again but I would be interested to hear your views.

Thanks

funscott

Im in the same boat. I am 0.75% above BoE so paying a whopping 1.25% at the moment. I cant see myself moving to fixed rates. when I got my flat I was paying 5.8% so untill it reaches that again its a win win.situation

getmore4less

Fixed rates currently have big margins over base.

Historicaly and probably in the future if base rates rise this margin will drop back. So future fixes will be closer to the current tracker.


Pretend you fixed now and pay that amount at the lower tracker rate and you will never(or avery very small chance) be in a positon where actualy fixing would have been better.

The overpayments will counteract the likely increases in rates.

Remember once you fix you are on the renewal cycle(broker gravy train) with fees etc.

benjo

Absolutely you would save money by swapping to a fix and all you need is to have the ability of foresight .

When you see a large, sustained rise coming over the horizon .... fix, before the banks see it coming. (Tongue firmly in cheek).

I think the point is that fixes are not cheap, but you are buying security of knowing what your monthly payment will be for ?? years, and yes, as soon as the base rates rise, fixes rise (generally, although at the moment the base rate has remained constant for some time while fixes rise anyways). So chasing after a good fix when rates are already rising is a little like herding cats.

It is possible to calculate whether you 'would' have saved money on your deal vs a fix by looking at the historical interest rate changes, but Im not smart enough to figure out the best time to fix - or brave enough not to fix (im a fix type of person).

[Deleted User]

The thing to remember is that you may never see a tracker rate that good ever again.
You may be able to benefit short term from a fix but over the term of your mortgage you are likely to pay more.
I've been mortgaged since 1990, never fixed and never regretted not fixing.

Gorgeous_George

There is a chance that the situation could arise. Clearly, if rates were to rise rapdily to 10% a fix today may seem like good value. It's like a game of Deal or No Deal. The 1p is out there and you've been offer £1,000 but the £5,000 is still on the board. No deal?

The other risk is that Woolwich renege on the deal. There is a possibility (however slim) that the lender could introduce a floor or collar or that they could increase the tracker margin for existing customers. This would be rather unwelcome news for those affected but it may be seen by many as being fairer for all. If Woolwich (and other lenders) assess the damage to their popularity of introducing retrospective collars as outweighing the damage to their balance sheet of doing nothing you may find the 0.67% mortgage rate being whisked away.

I hope it won't come to that for purely selfish reasons.

GG

Thrugelmir

Gorgeous_George wrote: »

The other risk is that Woolwich renege on the deal. There is a possibility (however slim) that the lender could introduce a floor or collar or that they could increase the tracker margin for existing customers. This would be rather unwelcome news for those affected but it may be seen by many as being fairer for all. If Woolwich (and other lenders) assess the damage to their popularity of introducing retrospective collars as outweighing the damage to their balance sheet of doing nothing you may find the 0.67% mortgage rate being whisked away.


GG

Totally agree with your comments. The greatest risk in the future, is the imposition of a base rate collar by the lender. As the smaller lenders raise the bar. In effect delibrately pushing borrowers to remortgage to a new lender. Then one of the top 10 lenders is going to break ranks and follow suit.

In reply to the OP. Concentrate on paying down your mortgage (or saving the overpayments whilst rates are higher). The way to pay less interest is clear the capital. Thats a better focus than guessing interest rates in the future.

funscott

Im with YBS and I was a lucky person whos contract didnt have a collar (down). I have been paying my normal 5.8% from day one so have been overpaying every month by a a good amount also my deal only alters my monthly payment every 12 months even though it is calcualted daily so for 12 months I know what I am paying without it going up n down but as I have contacted YBS and set my own amount they wont contact me until the agreed amount is less than their 12 month calculation

rothers

Thanks for all your replies.

I'm currently overpaying by £500 per month. When I took out the mortgage the Key Facts stated that for BBBR read BoEBR so should they try to take that away I would consider legal action.

Thrugelmir

rothers wrote: »

Thanks for all your replies.

I'm currently overpaying by £500 per month. When I took out the mortgage the Key Facts stated that for BBBR read BoEBR so should they try to take that away I would consider legal action.

Read your mortgage contract fully. The Key facts is just that. There will be an exceptional circumstances clause.

As the saying goes "ignorance is no excuse". Legal action would have no grounds.

rothers

I will read it again, but I don't remember a get out clause.

Cheers