To fix or not to fix - my decision

dantheman2010

I have also posted this in the Mortgage-Free Wannabe. I am not looking for advice, this is just for any people who may be considering whether to fix their mortgage or not. This is also not advising anyone on what to do, just sharing my thoughts/decision. May be worth a read, then again it may not. Just trying to help, if I can.

Recently my fixed term has ended and I have now reverted to C&G's SVR at 2% + BofE. I was going over and over whether to fix or stick.

I have decided to stick with the SVR and over pay. I have worked out that I would comfortably be able to afford and over pay even if it got to around 5% (BofE).

I have read many many reports etc online, a lot of people seem to think the BofE will go to around 1% by the end of 2011 and 2% by the end of 2012. Some even think it will stay at 1% or less for years to come. Obviously some think it will raise far sooner.

The other thing I thought was that when I fixed before the rate drop I got about 6.13% when BofE was about 4.5%, now the BofE is 0.5% the fixed rate offered if 5.29%. So the banks didnt really pass much of the rate drop on to the customers, so I would hope that dont pass on the rise. Surely they cant take with one hand and take with the other aswell? Well they probably can.

My plan, decided yesterday, is to stick, overpay, until overpaying becomes unmanageable and look at fixing when rates start approaching 4/5%, if affordable.

I just thought I would share with you what I am doing because if any of you are going through this, and if you are anything like me then it has been driving you crazy, do I fix or dont I?!

Thanks

DanTheMan

CloudCuckooLand

Might need to disclose your LTV, so people can relate to it...

Because "when rates start approaching 4/5%" - is a pipedream for many people on 90% LTV, who are having to consider 6%+ already.

dantheman2010

CloudCuckooLand wrote: »

Might need to disclose your LTV, so people can relate to it...

Because "when rates start approaching 4/5%" - is a pipedream for many people on 90% LTV, who are having to consider 6%+ already.

Sorry I meant when the BofE approaches 4/5%, not when the fixed rates start approaching 4/5%.

My LTV is about 85% so not ideal by any shapes, which is why I intend to over pay now, and would look at fixing when rates rise, but as I said - if affordable.

CloudCuckooLand

Looks like you'll have an extra couple of months with no change to BoE rates, after today's "shock" -0.5% GDP figure...it has pushed market expectations back from July to September for a hike...