Decision time!

gooner71

I have offers of:

5 yr Capped product, 2.49% over base rate with a cap of 5.99%

5 yr Fixed product, 4.49% for the period.

Anyone got a crystal ball to tell me whether BOE rates will stay below 2% for the next couple of years? If so, the Capped product would work out much cheaper.

Please help!

We're borrowing quite a hefty sum, so the reason for both of these products is to manage our worst case scenario. At 5.99% I'd be paying £250 per month more than the Fixed product. However at the moment, the Capped product would work out £200 per month cheaper.

beecher2

I'd go for the capped but pretend I was paying 5.99%. I'd either overpay the difference, or save it in order to make a capital repayment once rates go up.

gooner71

In view of the reports of likely interest rate increases in the near future, in response to 17 month high inflation figures, I decided to go for the fixed option.

At least I know what I'll be paying in 4 years time!