Eek, fixed rate or tracker...?

Rachel76

Hello, I realise that this is the $75,000 question, however, being an indecisive character, I would greatly appreciate some advice.
My 3 year fixed rate of 5.54% with the Skipton finishes at the end of this month. My LTV is 75% and I owe £97,000. I feel aggrieved at having paid such a comparatively high rate for the last 3 years and am therefore reluctant to make the same mistake again, despite realising that without the aid of a crystal ball, these decisions are often unavoidable.
So, do I gamble on the base rate rising very slowly and get a tracker...or do play it safe and fix in...but for how long? Ah, the agony of indecision. When I first bought 5 years ago, rates were only a couple of % above BoEBB, now, fixed rates are pretty high above the BoEBB, with the new austerity measures coming into force, surely the banks can't justify keeping fixed rates at such a high rate...can they?!
Any advice will be gratefully received, many thanks, Rachel.

jimbo_the_jetset

The other option is to go onto the Skipton SVR which appears to be 4.95% (on website).

Very much a personal decision I'm afraid. Could you afford the repayments on a tracker if they were to increase above what you may be paying now?

Thrugelmir

Rachel76 wrote: »

When I first bought 5 years ago, rates were only a couple of % above BoEBB, now, fixed rates are pretty high above the BoEBB, with the new austerity measures coming into force, surely the banks can't justify keeping fixed rates at such a high rate...can they?!

Currently BOE base rate is at "crisis" levels so is detached from influencing fixed rates for mortgages. The rate at which banks lend to each other (swap rates) on 5 year terms has been around 2.9% - 3% recently. Far above the headline base rate of .5%.

How close to the 75% LTV mark are you? As remortgaging to another lender may be an option. Though if your property is valued conservatively then you may miss the cut.

noodle

Rachel76 wrote: »

My 3 year fixed rate of 5.54% with the Skipton finishes at the end of this month. My LTV is 75% and I owe £97,000. I feel aggrieved at having paid such a comparatively high rate for the last 3 years and am therefore reluctant to make the same mistake again, despite realising that without the aid of a crystal ball, these decisions are often unavoidable.

You didn't make a mistake - you made a decision. You decided to opt for the security of a known payment over the risk/reward possibilites of a variable one. You got exactly what you wanted.

Don't be blinded by hindsight and let frustration or emotion influence your decision this time. What's done is done. You're in the position you wanted to be in three years ago, and there was absolutely nothing wrong with the decision you made.