interest rates going up tday?

Leon_W

marcovan

If your app was for a fixed rate then yes (as long as the broker gets the app in before the product end date)

If your app was for a tracker or variable then no, your rate will be higher along with your payments. The broker can only illustrate these types of loan at the interest rate prevailing at that particular time.

On another point. Historically if you switch mortgages every couple of years for 25 years and keep going for a fixed rate, then you will pay MORE than if you switched between the cheapest discounts or trackers. Lenders aren't daft and price in a fair margin on their fixed deals.

All the best in this high interest rate enviroment !

regards
Leon

Gorgeous_George

cordial wrote:

I thanked you for the effort you put in!... but really there can't be any argument about someone who's got him or herself a fixed rate of, say, 4.75% for the next three years if the average going rate over that period turns out to be 6+%, as some are predicting. You'd have to have some pretty remarkable 'associated costs' not to make a considerable saving.

You're also ignoring one of the major arguments for fixed rate, i.e. people want the certainty of knowing that there's going to be no change in a repayment that they've already calculated they CAN afford. For some, myself included, this is a huge consideration.

The benefit of not being fixed is that you are free to react to market changes. If IRs continue to rise to the level where you cannot afford the mortgage at the end of the fixed term, you could sell before the crash.

Those on fixed rates for a short term would not be in a position to act so quickly.



GG

chardhouse

I chose a 5yr fixed at 5.11%. My reasoning was simple- I stood more to lose with rates going up than I did if they went down. If I am paying £50 a month more than I need to I can live with that, but if I can't afford my mortgage if interest rates went up (and who knows where they will be in 4yrs?) then I could lose my house.
It's whatever suits the individual. No clear rights or wrongs.

http://www.moneyextra.com/dictionary/Interest-rate-history-003455.html

We need to see the bigger picture and face facts that during a 25yr mortgage we will probably experience big highs and lows in both interest rates and property value.

Gorgeous_George

I thought I'd ressurrect this thread from 2006. I think it makes interesting reading.

GG