On SVR... should I look to change this? Advice please :)

MrMoo123

Hi All,

My 4 year discount tracker mortgage deal ended just as the interest rates dropped, which worked out quite well as we are now on C&G's SVR which is currently 2.5%

I've got this nagging feeling at the back of my mind that interest rates are gonna shoot up eventually - should I be looking to move this onto a new fixed deal now or should I wait until the rates actually rise?

Wife isn't working at the moment and we are looking to have another baby, if the rates jump drastically we could be screwed!

Mortgage balance is currently about £157000 (house is worth £230000 I believe) if that helps.

Thanks in advance.

Euphoria1z

its safe to say interest rates will go up at some point, but i personally cant see them shooting up. i reckon it will start off at .25% increase within a yrs time and then similar increases gradually and settle around the 4% mark, and then maybe 5% if the economy is doing well in a few yrs time. this is all my gut feeling by the way. no one can really say.

opinions4u

2.5% tracking at 2% above base rate is excellent.

You would probably have to pay 5%-6% for a 5 year fix.

Use this calculator to work out how much you would have to pay at 6%.

I don't have a crystal ball, but I don't think BofE rates are going up by 3.5% in the near future.

Because of this I would save the difference in payments between 2.5% and 6.0%. If rates start going up I would reduce the amount saved each month by any increase in payments.

That way, if rates go above 6%, you can then dip in to your savings fund to subsidise higher payments for a time.

Good luck!

dimbo61

Try and fill your cash ISA allowance this year on top of your normal mortgage payments

MrMoo123

Thanks for the info guys/girls - that makes perfect sense, yes rates will go up for sure but they are very unlikely to shoot up to the level I would be fixed at.

I'm gonna look to put the additional cash I would be paying if I fixed into savings (best I can) and then dip into it if needed. I guess if interest rates stayed low we could always look to pay off a chunk of the mortgage with the money we would have saved