Fixed & Discounted Rates Question

Aletank

I'm due to rearrange my mortgage soon and have been looking at the rates on offer - I'll probably be staying with Nationwide who I'm currently with but on a new Fixed or maybe Discounted rate deal over 5 years.
Not so long back the Discounted Variable rate deal use to be about 0.25% lower than the Fixed deals, but now they are more or less the same at 4.99%.
Does anyone have any reasoning for this ? Maybe its because they are expecting rates to come down ?

payless

Stable or even falling rates do seem to be on the cards ( or so many of the the experts seem to be suggesting )

although they could be wrong- and if "security monthly cost" is a personal issue, then the true value of a fixed rate is hard to measure.

craigb_3

SWAP rates are very volatile at the moment.

ie- we go to London as a lender to borrow money and ask for a loan of say £100m over 2 years. We get offered say 4.60% fixed for 2 years. We offer it to customers at 4.80 for example. Once the 100m if issued out we pull product and make 0.20% on 100 million (200k guaranteed).

Nationwides fixed rates are good. last I looked 4.95 for 2 3 5 year fixed. They will be hoping you go for the 2 year option as then they will get another completion fee again in 2 years from you!

Aletank

mortgageman wrote:

Nationwides fixed rates are good. last I looked 4.95 for 2 3 5 year fixed. They will be hoping you go for the 2 year option as then they will get another completion fee again in 2 years from you!

Yeah thats what puts me off going for the 2 year deal - the £390 fee again.
But if i go for the 5 year and rates come down, I could be worse of that way - lol
The £390 fee spread over 5 years sounds better than spread over 2 years to me. Its just one gamble, the way i look at it though, at least I know what I'm going to have to pay for the next 5 years.
My 4.39% 2 year fixed with Nationwide is just coming to its end - I've been better off with that, so the 5 year 4.95% looks like the ideal deal .
Purley Swings n Roundabouts though!!

craigb_3

THATS whats it all about swings and roundabouts. (craigb previously mortgageman). What I think is as long as your with a lender thats not messing you about and offering you any deal... stick to them.