MSE News: Fixed mortgage rates expected to fall

This is the discussion thread for the following MSE News Story:

"Homeowners remortgaging were today told to sit tight as commentators predict fixed deals have further to fall ..."

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  • tleefoxtleefox Forumite
    98 Posts
    Our property is on the market at present with our current mortgage coming to an end at the end of May. I spoke to our mortgage advisor earlier in the week to look at our options for our next mortgage on our new property, and the rates were a lot better than when we took out our initial mortgage 2 years ago.
    My debts at 11th April 2011:
    Virgin Credit Card - [STRIKE]£1,900[/STRIKE] £1,500 (21.1% paid off)
    Nationwide Authorised OD - [STRIKE]£2,000 [/STRIKE] £1,500 (25% paid off)
    Student Loan - exact amount TBC but circa £5,000

    I'm on the road! :T
  • cexbcexb Forumite
    14 Posts
    To fix or not fix, that's my question.

    I've just come to the end of a 5 year fixed rate of 4.74, but obviously am now on a tracker which works out much better. Do I look to fix again though? Trouble is, I would debate renting my house out if I buy a property with my partner, but that proves tricky when tied into fixed, or it did last time around (had to have it rented for a year before A&L would deem it as a rental property and switch to different mortgage type!)

    Opinions welcome ... currently still overpaying mortgage each month which I was anyway, so that's all bringing the capital down each month.
  • rsspencersspence Forumite
    170 Posts
    Part of the Furniture 100 Posts Combo Breaker
    My fix of 5.99% ends in Sept, I have had a quote from Santander of 3.79% for 2 years. But it is difficult to know what to do, accept or wait for some potentially better deals. Decisions, decisions........
    Trying my best to save where I can......
  • emmaw6481emmaw6481 Forumite
    57 Posts
    Our tracker mortgage comes to an end in Nov (a while yet I know) and we're wondering whether to try and get a fix rate agreed now as we thought that the rates would start to go up BUT having just read this article now I'm not so sure. The other issue we have is that because I currently don't work (am off work looking after the kids) our mortgage is around 4 1/2 times my hubby's salary. Does anyone have any suggestions about who does mortgages for over the usual 3 times your salary?

    Many Thanks
  • GMSGMS Forumite
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    Part of the Furniture 1,000 Posts Combo Breaker
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    Fixed rates are falling at present due to swap rates coming down as the expected interest base rate rises were put back on poor economic data. Today it is reported that base rates will rise sooner to combat inflation.

    As the current situation is pretty much uncharted territory it is impossible for anybody to predict but with falling fixed rates and more expectation of base rate rises now could be the perfect time to secure a fixed rate which is likely to look very low in the future.
    I am a Mortgage Adviser
    You should note that this site doesn't check my status as a mortgage adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
  • TC1TC1 Forumite
    104 Posts
    GMS wrote: »
    Fixed rates are falling at present due to swap rates coming down as the expected interest base rate rises were put back on poor economic data. Today it is reported that base rates will rise sooner to combat inflation.

    As the current situation is pretty much uncharted territory it is impossible for anybody to predict but with falling fixed rates and more expectation of base rate rises now could be the perfect time to secure a fixed rate which is likely to look very low in the future.

    Discuss....
  • sdd7677sdd7677 Forumite
    128 Posts
    I totally agree with above. I was thinking of tracker at the end of my 3 yr fixed term with HSBC in may. But with infaltion rise-interest rise reports I am in dilemma again. Whether to go with BOE+1.89 tracker or 4.59 percent for 5 year fixed. Dont know what to do !!!
  • Gorgeous_GeorgeGorgeous_George Forumite
    8K Posts
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    Reports say rates will rise... except when they say rates will fall.

    Each of us needs to make our own minds up. Mortgage advisers will recommend fixing on a new rate. It may be better to float on a tracker. YOU need to make your own decision.

    GG
    There are 10 types of people in this world. Those who understand binary and those that don't.
  • GMSGMS Forumite
    5.4K Posts
    Part of the Furniture 1,000 Posts Combo Breaker
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    Swap rates which lenders borrow against rose steadily over recent months as markets had priced for a base rate rise sooner rather than later. Last couple of weeks has seen swaps down and lenders reducing fixed rates as the markets expected any base rate rises to be later in the year.

    Today Mervyn King has been quoted as saying inflation may not reduce as previously thought and hinting at base rate rises sooner rather than later. This could push swap rates up which will have the effect of lenders raising rates again.

    So now could be a good time to fix.

    Wish I knew the answer to possibly the biggest question for mortgage holders ever, 'When will rates rise?' It seems to be accepted that they will do but the timing is in question.

    Rates available today may be above rates enjoyed by holders of tracker rate mortgages but as rates rise it is likely the fixed rates will follow. This leaves the possibility of the tracker rate rising to the point where people want to remortgage to a fix only to find that the fixed rates have risen way above where they are today.

    It all comes down to personal choice. If the mortgage holder is worried about rises then a fixed should be considered. If they are happy to take a chance then enjoy the tracker rates.

    A fixed rate of around 5% may seem high at present but for 5 years security of payments is historically cheap, and in 3 years may look like a bargain.
    I am a Mortgage Adviser
    You should note that this site doesn't check my status as a mortgage adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
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