advice on interest rates and fixed rates

upsydaisy09

Hi all

Were on a 0.75% over the BOE base rate with A&L (Santander now). Paying £334.00
Mortgage owed £99.500 / 29yr mortgage / and borrowed £105.500 (house bought at £110.000 and worth roughly £130.000)
Very worried about interest rates as no savings, 90 day redundancy notice etc.
Got an offer of 2 yr fixed at 4.49% then 3.7% over the BOE base rate. Would pay £507.00.
If we fix (for security) would we be likely to get another fixed in 2 yrs?
Or should we just ride it out and try to save as much as poss (told if we could put down £9,700 we'd have more options, such as a 5 yr fixed-which we ideally wanted as thats what we had in july 2005 and it ran out this yr).
We luckily both have good jobs and credit scores, but because of recent redundancy scares feeling secure from interest rate rises is worth paying more at the mo but just concerned that it is only for 2 yrs and so we'd still be in a pickle in december 2012 (when fixed rates could be 8%?)
Any thoughts and opinions apprecaited. We have to send the fixed deal off tomorrow latest to get it.

beecher2

I'd say stick with what you've got - you've got a very good rate and I can't see how a 2 year fix would be worth it for you. Save the £200/month (and any more you can spare) and get your LTV down.

Thrugelmir

You need to consider whether you'll ever get .75% above BOE base ever again. Once you switch mortgage product there's no return.

Consider making a significant overpayment whilst interest rates are low.

On the figures you've quoted you obviously can afford an additional £173 per month.

Remember mortgage interest is calculated and charged monthly. The quicker the capital balance is reduced the less interest you'll pay.

The lower the capital balance the sooner your LTV will improve. Though this is subject to movement in actual property prices.