Fixed rate increases?

noodle1980

Our fixed rate is up at the end of this month with Halifax & they have offered us another fixed rate @ 6.19% & a £999 product charge. But if we just leave it we will go on to variable rate of 3.5%. I do like been on a fixed rate just for the knowledge of knowing how much is going out each month. But now I am in the dilemma that the fixed rate has a £300 differance & we could really use that at the mo. But I am scared that fixed rates will go on a big increase & we will miss out there, ARRRRGHHHH Can anybody help me with this. Thank so much

Have just checked the paper work sent from Halifax & I have lied it was 5.19%................sorry. Bet that changes evertything? I am new at this money thinking lark

y3andy

im in the same position. been on the SVR of 3.5% for 2½ years but Halifax have offfered my 5.29% with no fees, 5 year fix. Very tempting. I have reserved it for 2 months so have time to mull it over but I'm tempted to take it.

6.19% is a big leap though from 3.5% expecially with a grand fee. If you shopped around couldn't you find anything in the middle? You'd need interest rates to go up over 2.5% to be worse off which doesn't seem very likely in the next year.

Decisions, decisions.....

opinions4u

What rates could you get elsewhere if you changed lender?

But now I am in the dilemma that the fixed rate has a £300 differance & we could really use that at the mo.

I think you should use this £300 for debt reduction purposes. Clear the credit cards. Overpay loans (if they allow overpayments). Repay the overdraft. Overpay the mortgage.

Build your budgeting around this £300 being part of your outgoings. That way, if rates do rise, your budget is able to cope with it and your debts are going to be lower.

WellKnownSid

noodle1980 wrote: »

Our fixed rate is up at the end of this month with Halifax & they have offered us another fixed rate @ 6.19% & a £999 product charge. But if we just leave it we will go on to variable rate of 3.5%.

Assuming the SVR is linked to the base rate, the base rate would have to rise to 3.19% before you are paying the same as your fixed rate.

Furthermore, that's unlikely to happen overnight... so even if the rate rose linearly from 0.5% to 5.88% over the duration of the fixed term, then you'd still be approximately break-even over the term.

Except you wouldn't, because you wouldn't have needed to find the product fee.

Plus if you follow O4U's good advice and aggressively pay down any higher rate debts with the £300 you'll be better off still.

noodle1980

Thanks for everyones advice :T
We can't really move to another lender due to having another 35yrs on mortgage..........& husband just towards end of training to be a Electrician........so am thinking nobody else would touch us with a barge pole lol. We would just manage the fixed payment with all other outgoings but it just frightens me that everyone always has something unexpected each month happen & I really don't want to put anymore on CC due to them being bulging already.
I think it's just the unknown of variable, we got badly caught out variable in 2001/2002 but I think I should be brave......do not want to have money convo with panicky hubby though
Thanks again money savers x

noodle1980

Are the SVR usually linked to base rate?