fixed?

neilwith

I am currently on a variable rate of 2.6%. I have a busy (expensive) few years ahead and am considering a fixed rate, and have figures of approx 4-5% over 5 years.
Is this worth considering?
I expect rates to rise but any ideas of how much?
thanks

yelf

no one knows. i think they'll go up 1% over the next 2yrs so im sitting on my tracker. others think they will go up a lot and are saying fix. if you're concerened then best thing to do is fix.

neilwith

cheers yelf,
I appreciate your reply

any other views on this?

epsilondraconis

As Yelf has said no one knows for sure. If you search the web you'll find lots of views on what may happen in the future.

I think the best thing to do is go with your instincts. If you are the worrying type and would be concerned if interest rates went up, then it may be best to fixed. A lot of it comes down to your view on risk.

I was in the same boat as you a couple of months ago. I chose to fix for 5 years at 3.99%. We'll have to wait and see whether that turned out to be the correct decision.

Good luck...

Eezageeza

Personally I think interest rates will stay low for the foreseeable future (i.e. the next 3 years at least). The reason for this is that the big government spending cutbacks and raise in VAT will curb people's spending which will depress the economy, so the BoE will keep base rates low in order to avoid further restraining the economy. (I realise that the VAT rise will initially cause prices to rise and therefore potentially cause inflation to increase, which would argue for a rate rise, but I think any inflationary increase will be transient as the increase in prices will result in people buying less, causing retailers to reduce prices).

As a result, I think you should go on a tracker for 2-3 years. Coincidentally, I fixed at 5.49% in August 2007 and am really regretting it. Still, you win some, you lose some.

dimbo61

At the same time YBS have a 5 year fix at 3.99% fee £995 LTV 75% so if you do want long term security for the next 5 years!

milliebear00001

I think this depends on your circumstances, and personality. I am very risk averse and have a tight budget, so will be fixing for the next four years. If interest rates stay low, well - c'est la vie!

getmore4less

neilwith wrote: »

I am currently on a variable rate of 2.6%. I have a busy (expensive) few years ahead and am considering a fixed rate, and have figures of approx 4-5% over 5 years.
Is this worth considering?
I expect rates to rise but any ideas of how much?
thanks

What does you budget show you can afford over these few years.

What rate does that support.

What if you overpaid now(pretend you were on 5% that will reduce the debt and make the rate you can afford higher).

neilwith

thanks for all these thoughts

ClaireB7

Eezageeza wrote: »

Personally I think interest rates will stay low for the foreseeable future (i.e. the next 3 years at least). The reason for this is that the big government spending cutbacks and raise in VAT will curb people's spending which will depress the economy, so the BoE will keep base rates low in order to avoid further restraining the economy. (I realise that the VAT rise will initially cause prices to rise and therefore potentially cause inflation to increase, which would argue for a rate rise, but I think any inflationary increase will be transient as the increase in prices will result in people buying less, causing retailers to reduce prices).

As a result, I think you should go on a tracker for 2-3 years. Coincidentally, I fixed at 5.49% in August 2007 and am really regretting it. Still, you win some, you lose some.

There is only way BoE rates are going in the foreseeable future - and that is up. No one knows by how much and how quickly, but there is certainly talk within the BoE, apparently, that it will start within the next 6 months.

Having said that a tracker with minimal exit fees certainly makes at the moment.

As for the OP - fixed/tracker will depend now good a fixed deal you can get and how long you think it will take BoE rates to get up to similar levels of the fixed.