Interest rates

glitzy

Am I right in thinking that any fixed rate now will change if the Boe rate changes, as the banks will get scared & put their rates up - serious thinking of going for a tracker hsbc 60% ltv but if the rates go up in the next 2 years any fixed rate would have gone up aswell?

Yorkie1

Not sure I understand your train of thought.

If you actually took out a fixed rate now, it would remain fixed for the duration of the fixed period e.g. 2, 3 or 5 years. That's the whole point of the word 'fixed' - whatever happens to the base rate, your repayments remain fixed.

If you are asking about the rates on offer for fixed mortgages, then yes it's likely that what is offered will change if base rates go up. Although banks have already started offering higher rates in anticipation of that rise. So, what is on offer will in all likelihood also go up.

The dilemma is whether to go for the certainty and higher (initial) cost of a fixed rate now, or to go for a tracker which has lower initial repayments but has the inherent risk that the repayments will inevitably go up over time as the base rate rises.

glitzy

Yes that is what I meant thanks. I do have to decide whether to track or fix - I was stung a few years back when I was on a tracker, but they look so promising I just have to look at the bigger picture 3/5 years down the line.

Thrugelmir

Fixed rates have been progressively rising since last October. As there are wider issues than merely BOE base rate impacting on them.

The banks will raise fixed rates as the cost of raising the money to lend to you will rises. Has nothing to do with the banks being "scared". Just commercial reality of lending at a profit.