FTB - Mortage offer

Boba_Fett

Hi all

what are you guys doing, playing it safe with a fixed rate or taking advantage of the variable rate at the mo?

i have been offered a 5 yr fix at 4.09, does this sound good to you?

thanks in advance

Thrugelmir

Opting for a fix is a gamble. Only certainty is the repayments.

Different products suit different people and circumstances.

CloudCuckooLand

4.09% is a good rate.

Same old problem, fix and you miss out on low rates. Don't, and you take a chance that the tracker/fixed deals go up.

Its a toss up.

To me, certainty of the fixed monthly outgoing is preferable to a short-term gain with a medium-term risk attached.

hshen

I always see fixed rates as something of a gimmick as potential future rate rises are already priced in.

i.e if 80% of a 0.5% rate rise in the next 2 years, probably 85% of it is in the price. (the 5% is to cover their backside against volatility)

But I can see for someone borrowing close to what they can afford, the certainty helps until the principal is paid off a bit.

For people with overpayment power, fixed is not so good IMO.

dimbo61

A 5 year fix at 4.09% is a very good deal so you must be putting down a good deposit 25%+ ?
Most mortgage deals allow 10% overpayments a year ( check your offer!) so you have the security of a long term fix and the ability to OP on top.
What you need to consider is "will we? be staying in this property for at least the next 5 years"