Is it best to switch to a fixed deal now?

suiko

My present deal comes to an end at the end of the month. I searched for fixed deals, but according to a couple of comparison sites, all of these are a bit more expensive than my present deal (with npower, therefore no price rise as yet), and quite a lot more expensive than Ebico, which is the cheapest by some distance (over 10%).

Am I right in switching to Ebico, or am I missing something?

eurmalian

It's a gamble. If prices don't go up, or go up less than difference between the tariffs, then you're better on the Ebico deal. If prices go up more than that then you'd be better taking the fixed rate deal. Unfortunately, there is no definite right or wrong answer, you just have to take a guess at which way is going to work out better...

suiko

I think they can go up up to 10% and it will still be cheaper. More than that, it gets a bit iffy...

eurmalian

To make it even more complicated, the longer it takes prices to go up, the more they have to go up to make fixed rate worth it. For example, if they go up by 15% next month, you have one month of you paying 10% more, followed by however long the fixed rate is for (say 1 year for the example) at 5% cheaper, which is definitely worth it.

However, if they don't go up for 6 months, then you have 6 months at 10% more exepnsive and then 6 months at 5% cheaper, which still works out with you out of pocket.

For example 3, if prices go up 9% in a month, and then another 15% 6 months after that, then you're back to saving a lot of money again, even though the initial increase didn't look like enough to make it worth it.

Going by past history, now that one supplier has increased their prices, all the rest are likely to follow suit. The question just becomes when, and by how much...