Are interests set to go up or come down?

BoBoDobie

I know that's potentially a 'how long is a piece of string question' but I wondered what the general consensus is? I know on Martins advice I've fixed utilities rates.

My mortgage deal ends in September at which point I can go onto a fixed rate of 3.48% (£199 set up fee) for 2 years or 4.24% (£199 set up fee) for 3 years or a 4.65% (£199 set up fee) for 5 years.

Or if I want to come away from fixed (which I've always had) I can have a 3.29% variable rate that the building society could change monthly (do they usually - I'm new to variable rates) but tracks the Bank of England base rate. That's also a £199 set up fee and is very tempting to go for. There are no ties in with it. As I say I'm wary of having a variable rate as I'm a bit clueless as to what the rates are doing.

Thanks for any advice.

Thrugelmir

Longer term view is that interest rates will rise.

While promotional rates may be available from time to time. These will only last whilst lenders have funds available.

BoBoDobie

Thank you Thruglemir. Might play it safe with a fixed rate then X

BoBoDobie

Just another thought but how much is 'usual' for them to rise by and how quickly? If there is such a thing as usual.

dwsjarcmcd

Tye_Bo wrote: »

Just another thought but how much is 'usual' for them to rise by and how quickly? If there is such a thing as usual.

No. It depends on what your talking about, if it's the lenders SVR, then they tend to be driven by Bank of England base rate changes, if it's fixed rates then they are impacted by money market rates which change daily.

Personally I think the 5-year rate and fee you have been quoted seems like a cracking deal. That's the one I'd go for (but you may not!)

GMS

See the link for historical rates

http://www.bankofengland.co.uk/mfsd/iadb/Repo.asp

Small fluctuations for years followed bt a drop of over 5% in less than 2 years due to the financial crisis.

'Normal' is not a word to describe current rates, and any prediction of how and when rates will rise will vary between anybody who has a so called opinion on it.

Inevitable that rates will rise but when and by how much is anybody's guess.

If you have concerns over rates rising then consider a fixed rate. At least compare a fixed against the tracker and see what the difference is. May be a small price to pay for security, or a figure that can be used to overpay if the tracker option is chosen.

Do not assume that the fixed rates of today will be available if and when a tracjer becomes 'expensive' as the fixed rates are likely to have increased at that point too.

pledgeX

Tye_Bo wrote: »

Just another thought but how much is 'usual' for them to rise by and how quickly? If there is such a thing as usual.

I don't think anyoine could answer that questions accurately. Personally I reckon it'll go up 2-3% over the next 2-3 years but I have nothing to base this on whatsoever.

Back to your orignal question. Have you shopped around for those rates, I'd imagine you could get better rates than that tracker comparing it to the fixed rates you quoted.

Do you have a fair amount of free cash at the end of each month? And are you sensible with money? If yes then I'd personally go for a tracker and overpay now, and if the rates go up, you can stop overpaying but still comfortably pay the mortgage.

I personally don't have much spare cash so have opted for a 5 year fix for stability, especially as I'm a FTB and only have a rought idea of what my bills will be.

dimbo61

We know nothing about you unless I start reading your other posts !!!
Not even if you are a man or woman, age, job, family, savings job security etc
I have just finished a 5 year fix at 4.74% and even though the BOE dropped to 0.5% over 2 years ago I was happy with the security that the fix offered.

Thrugelmir

Tye_Bo wrote: »

Thank you Thruglemir. Might play it safe with a fixed rate then X

You'll save more interest in the longer term by reducing the amount you owe rather than attempting to predict future rate movements.

BoBoDobie

Ok thanks all. No there's no more money to pay anymore towards the mortgage (currently £619 per month at 4.39% over 23 years). I've historically shopped around a bit more (London & Country are who I always use) but this time for my own reasons I will be staying with my current provider.

They did give me other quotes for the fees with them were £999 and I don't want to pay that much.

The 5 year deal is kind of off putting as at £651 per month, it's another £30 to find. But I get that it's fixed for 5 years so no worries. I think the 2 year deal appeals as it's less than I'm currently paying so I feel like I'm saving something. As I say cash is not in abundance!