Fixed rate or SVR - what would you do?

tajk321

My present mortgage deal with Nationwide is coming to an end and I will revert to SMR of 2.5%. I have been offered a no fee 2 year fixed rate at 3.98% with £300 cashback. What would you do in my position? Obviously the base rate will go up in the next 2 years but do you think I am likely to be better off staying put? Thanks

opinions4u

tajk321 wrote: »

My present mortgage deal with Nationwide is coming to an end and I will revert to SMR of 2.5%. I have been offered a no fee 2 year fixed rate at 3.98% with £300 cashback.

By who?

What would you do in my position? Obviously the base rate will go up in the next 2 years but do you think I am likely to be better off staying put? Thanks

I'd stick with the 2.5% rate, but overpay. You won't get the same SVR again once you've switched products.

That said, my circumstances could be different to yours.

tajk321

Thanks - the fixed rate offer is also with Nationwide.

betmunch

How do you know the Base rate will go up in the next two years?

The Centre for Economics and Business Research has said they expect it to stay at 0.5% until the end of 2012.

tajk321

betmunch wrote: »

How do you know the Base rate will go up in the next two years?

The Centre for Economics and Business Research has said they expect it to stay at 0.5% until the end of 2012.

Well I don't actually know but everything I have read so far has suggested that it will rise by 2011. I hadn't seen the advice from The Centre for Economics and Business Research so thanks for that. Let's hope they are right.

opinions4u

tajk321 wrote: »

Thanks - the fixed rate offer is also with Nationwide.

I assume that you won't go onto the 2.5% rate at the end of it, but a higher rate without the link to BofE. This should be part of your consideration before switching products.

betmunch wrote: »

How do you know the Base rate will go up in the next two years?

It is by no means guaranteed. Higher taxation slowing the economy could mean the need to raise rates is low.

The Centre for Economics and Business Research has said they expect it to stay at 0.5% until the end of 2012.

In May 2007, what did they say base rates would be at the end of 2009? Just wondered like .

betmunch

@ Tajk - The report was in a trade mag on the 22nd June and the figures given were due to the growth rate being lower than predicted under the labour govt. And yes, lets hope they are right!

@ opinions4u - No Idea what they would have said in May 2007. I was so busy then I didnt have time to read Mortgage Strategy (or post on MSE)! However point taken, I bet it wasnt rates will be at record lows!