Variable or fix?

stoobyizzy

After my 5 year fixed rate with the Nationwide finished in August, I went on to variable and am benefiting from low rate at moment. However, there has been a lot of suggestion that the rates will go up in 2011. Should I perhaps start looking for a good fixed now before its too late?

Thrugelmir

Have you made use of the "saving" in monthly outgoing to speed up repayment of the mortgage debt?

stoobyizzy

yes, paying same monthly amount .

Thrugelmir

Then deciding whether to fix or not is very much one of personal choice. As when rates may start to rise is anyones guess. Even if you fix now then you'll still face higher rates in another 5 years time when the term ends. Possibly much higher by then.

By reducing the capital balance owed on the mortgage you are progressively bringing down the impact of future rate rises. Every month that passes each mortgage repayment consists of more capital and less interest.

So if you can comfortably afford to maintain your repayments as they are. Then you could absorb any immediate rate rises.

Use the money you would have paid in product fees to reduce your mortgage further. Mortgage interest is calculated monthly so sooner the balance is reduced the sooner the impact.

Just my personal view currently. As we'll never see interest rates this low ever again.