to Fix or to Varible

neilsc99

hi all, my current mortgage is up for renwal in october and went to see a finacial advisor at the weekend. the cuurent varible rate of 2.5 percent sounds very goods for maybe 4-6 months. So how does everyone think the rates will go and how long will they hold for ? i know things can change but surely rates will hold until mid next year
thanks neil

Bath1865

It is very difficult to predict the future, particularly in these volatile economic times. To try and get a feel, I look at market expectations of future bank base rates which suggest the first 0.25% increase in March/April next year, followed by 0.25% rises every 3 to 4 months thereafter.

Competing pressures are keeping the economy going vs keeping a lid on inflation.

If your variable rate is linked to base rates it will move in line, but if it is a bank's standard variable rate there is the additional uncertainty that the bank might make adjustments on top of movements in the base rate.

There are other considerations such as how you value the certainty of fixing and what fixed rates will do next year if you hold off.

Hope this helps.