To fix or not to fix? That is the question.

meg001

Hello all...first post here so hope I'm in right place!

Mu hubbie and I have been riding the SVR since March last year and overpaying to reduce the mortgage. However a fixed rate of 4.5% for 5 years has been offered by our IFA with only a £750 arrangement fee.

Our dilemma as I'm sure with many others here, is do we bite the bullet and sign up to 5 years of security or, should we continue riding the low rate wave and overpaying but with risk that interest rates could rise over the next 12 months and that such a good deal will be no longer available?

I'd love to hear from others, especially Martin, as to what you might think and whether you have / are facing a similar predicament.

If only we had a crystal ball life would be so much easier - and we'd all be better off!

opinions4u

meg001 wrote: »

Hello all...first post here so hope I'm in right place!

Welcome. Exactly the right place.

Mu hubbie and I have been riding the SVR since March last year and overpaying to reduce the mortgage.

Good approach. What SVR is it that you're paying? Does that SVR track BofE base rate of does it give your lender complete discretion? Who is your lender?

However a fixed rate of 4.5% for 5 years has been offered by our IFA with only a £750 arrangement fee.

On the face of it, that sounds a decent deal. Compare alternatives at sites like www.moneyfacts.co.uk/mortgages, but 4.5% sounds pretty good to me.

How much do you owe on the mortgage and what is the property actually worth?

Our dilemma as I'm sure with many others here, is do we bite the bullet and sign up to 5 years of security or, should we continue riding the low rate wave and overpaying but with risk that interest rates could rise over the next 12 months and that such a good deal will be no longer available?

A key factor in this is the standard variable rate you currently pay. If it's 2.5% with Nationwide or C&G I'd be tempted to stick with the overpaying strategy. If it's 4.99% with A&L I'd fix. There's a sliding scale in the middle!

I'd love to hear from others, especially Martin, as to what you might think and whether you have / are facing a similar predicament.

If Martin has any sense, he'd sit well and truly on the fence. I think rises in interest rates are inevitable, but the question is how much? Many so called experts would suggest no more than 2% over the next 3 years. Others would suggest different figures. I doubt any of them predicted the drop from 5.5% to 0.5%.

If only we had a crystal ball life would be so much easier - and we'd all be better off!

Nah, the lenders would find a way to make more money out of us one way or the other!

Whatever decision you take, I'd suggest you agree a pact with hubby now that you've made it for the right reasons and if hindsight makes it a poor decision you don't beat yourselves up over it.

meg001

Hi there and thanks for the prompt advice! Here is info you requested - I hope ; )

Good approach. What SVR is it that you're paying? Does that SVR track BofE base rate of does it give your lender complete discretion? Who is your lender?

2.74%. Yes it tracks BofE and not lenders discretion. Lender is The Mortgage Business (TMB).

How much do you owe on the mortgage and what is the property actually worth?

£182,000 and surveyor for the 4.5% package just valued at £260,000.

fozzeh

Hasn't it been grumbled that the BR is up 0.5% in Sept 10 and March 11 minimum?

I'm currently SVR at 2.49% (NWide) which is pretty amazing...but, with probably moving soon, may look at fixing. Think the best I can get is 4.49 with no arrangement fee.

I'd agree and stay on SVR for at least a year...ish.

Peelerfart

fozzeh wrote: »

Hasn't it been grumbled that the BR is up 0.5% in Sept 10 and March 11 minimum?


I'd agree and stay on SVR for at least a year...ish.

Not heard that one,and can't see for the life of me ,why it would those specific dates and that specific minimum amount but,

I'd agree, keep on doing what you're doing and keep your eyes and ears open.

Good luck with whatever you decide

Pincher

I would gamble by staying on the 2.5% SVR and overpay until you reach 65% LTV (currently you are at 70%).

With the best deals available to you at 65% LTV,
you'll be spoilt for choice.

dimbo61

Check out the Coop 5 year fix at 3.99% fee £999 LTV 75%
With that big a mortgage and the coop deal think about it