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YBS 10 Year FIX 4.69% - IS THIS AS GOOD AS IT GETS?
Comments
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HAMISH_MCTAVISH wrote: »The chances of seeing 8% base rates again, at least in any of our lifetimes, are pretty much zero.
The chances of seeing 5% base rates in the next decade are pretty much zero.
The chances of seeing 3% base rates in the next 5 years are pretty much zero.
Thats the common perception but UK relys on foreign money to borrow. Ive no idea what Chinese policy will be in 5 years.
If they dont lend money to us then we raise rates till some rich country decides it willif the second five year fix was at 5.93%.
In 2016 I think a normal variable mortgage will be around 5% (best case scenario). Its unlikely a fixed rate would be as low
I would opt for 10 years if possible as it will maximise the benefit from any change in rates. It is less flexible but should compare very well over time
Ive only heard of better in USA 25 year 4% fixes are possible. Like Hamish shows, gilt debt really is that 'cheap' and UK has this in common
To me it just highlights how extremely unlikely this situation will lastwhere the market expects base rates to be
The market can react violently in the opposite direction as we've seen in the past.
If the OP says he cant afford high rates, I think he is safer with a fix0 -
sabretoothtigger wrote: »The market can react violently
Sure.
And a 747 can fall out of the sky and flatten his house too.....
But don't confuse possibility with probability.If the OP says he cant afford high rates, I think he is safer with a fix
It's insurance.
Some people are prepared to buy overpriced insurance against the most unlikely of events. It happens all the time.
I can see why people do so on an emotional level, but that doesn't make it a rational thing to do.“The great enemy of the truth is very often not the lie – deliberate, contrived, and dishonest – but the myth, persistent, persuasive, and unrealistic.
Belief in myths allows the comfort of opinion without the discomfort of thought.”
-- President John F. Kennedy”0 -
But for the first 5 years...... you will have piece of mind that you have limited your exposure to the fact that the politicians and bankers will sell us to hell in a handcartHAMISH_MCTAVISH wrote: »No, I'd agree that for the second 5 years you may only be overpaying by a percent or so.
But for the first 5 years......I think I saw you in an ice cream parlour
Drinking milk shakes, cold and long
Smiling and waving and looking so fine0 -
But for the first 5 years...... you will have piece of mind that you have limited your exposure to the fact that the politicians and bankers will sell us to hell in a handcart
If that peace of mind is worth up to 10% of the purchase price of a house to you, then good luck.
With financial decisions like that, you're going to need it.
“The great enemy of the truth is very often not the lie – deliberate, contrived, and dishonest – but the myth, persistent, persuasive, and unrealistic.
Belief in myths allows the comfort of opinion without the discomfort of thought.”
-- President John F. Kennedy”0 -
In 2005 people would say the chances of seeing 0.5% base rates again, at least in any of our lifetimes, are pretty much zero.But for the first 5 years...... you will have piece of mind that you have limited your exposure to the fact that the politicians and bankers will sell us to hell in a handcart
Who can say what will happen, if security or insurance means you can sleep at night then just paying a bit extra may be well worth it.0 -
so there you go OP - I think this thread represents your options very concisely
either do it & risk 10% of the house price purchase over 10 years (Hamish regards this as likely)
don't do it & risk serious challenges ahead if rates increase more than expected (I regard this as likely)I think I saw you in an ice cream parlour
Drinking milk shakes, cold and long
Smiling and waving and looking so fine0 -
either do it & risk 10% of the house price purchase over 10 years (Hamish regards this as likely)
don't do it & risk serious challenges ahead if rates increase more than expected (I regard this as likely)
A fair assessment.
However I would suggest the OP do as much research as possible with regards to this subject.
And not on web forums like this one....
Read up on the views of the MPC members expressed in speeches and articles.
Look at the projections from leading economists.
Try to get a good grasp of the mechanisms through which interest rates rise and fall, and consider the likelyhood of the various impacts of higher and lower rates on the probable economic trajectory.
Do that, and the safest course of action will become a fair bit clearer....“The great enemy of the truth is very often not the lie – deliberate, contrived, and dishonest – but the myth, persistent, persuasive, and unrealistic.
Belief in myths allows the comfort of opinion without the discomfort of thought.”
-- President John F. Kennedy”0 -
Its great to hear the different opinions on this. I have performed extensive research on this.
Overall, I reckon my premium on the 10 year fix is about 4% of the property price.
The mortgage payment represents 40% of our joint income. Even tho the risk may be low according to hamish, I dont want to be exposed to potential high rates.
I believe rates will significantly rise over ten years, if they dont, the piece of mind is worth the 4% premium.
Cheers for all posts0 -
Overall, I reckon my premium on the 10 year fix is about 4% of the property price.
I reckon it's that in the first 2 years alone.....
But good luck anyway.“The great enemy of the truth is very often not the lie – deliberate, contrived, and dishonest – but the myth, persistent, persuasive, and unrealistic.
Belief in myths allows the comfort of opinion without the discomfort of thought.”
-- President John F. Kennedy”0 -
HAMISH_MCTAVISH wrote: »The chances of seeing 8% base rates again, at least in any of our lifetimes, are pretty much zero.
Making a prediction about interest rates for the next 50 to 70 years is very, very unwise!...much enquiry having been made concerning a gentleman, who had quitted a company where Johnson was, and no information being obtained; at last Johnson observed, that 'he did not care to speak ill of any man behind his back, but he believed the gentleman was an attorney'.0
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