Fix or Stick? What are the predictions for the base rate

chris961

Our current nationwide fixed mortgage deal has just ended and we are now on a guarenteed 2% above the Bank of Englad base rate putting us at 2.5% the best fixed term ratres around at the moment seem to be around 4.1%. so we are currently saving around £90.00 per month by not fixing, Im a bit of a gambler and am tempted to stick as we are until the Base rate rises to 2% then fix. My wife is paniking and wants to fix now? Do any experts out there have any idea how long its likely to take for the base rate to rise to 2%ish? Any thoughts? Many thanks Chris

GMS

The so called 'experts' are stil arguing amongst themselves as to when rates will rise. It was assumed it was a case of when they rise however talk over the last couple of days has suggested a further reduction.

Your rate you have now will give you the opportunity to overpay and reduce your balance.

Youi mention fixing when rates get to 2%. The fixed rates available today are higher than those available 6 months ago. As base rates increase then the fixed rates are likely to do similar. Don't assume a fixed of today will be there in the future.

A 2% above base tracker is a great rate. Many would jump at this if available.

michelle2008

I am on the same deal and am taking the opportunity to overpay. Current predictions are for ir to stay low for a couple more years - however no one knows for sure.

I have saved a small fortune over the last Few years - and i am comfortable to take a bit of a gamble. I am also trying to reduce my LTV ratio so when I do decide to fix I can access the best deals available at that time.

ACG

I read a thing today which was by heads of banks and the people we would class as the experts. The predict the base rate will remain at 0.5% until the beginning of 2014.

As to what the lenders will do....thats quite different. I cant see them raising rates a great deal if at all in the next 12 months but nobody really knows.

Thrugelmir

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Then use the saving to overpay your mortgage. To maximise the benefit.

marathonic

I'm looking at the options available too. I want to buy the best house I can afford now as a FTB as I've read estimated moving costs of £5-10k when trading up.

I'm going to see a mortgage broker next week to see what I should be able to borrow given my personal circumstances.

If I end up going for a 75% LTV product, the Bank of Ireland 5 year fix at 3.49% with a £799 arrangement fee looks mighty tempting (I'm in Northern Ireland).

The best alternative available to me is a 2.79% tracker from Britannia.

I'm tempted to go for the tracker as I think rates will stay low for a few years and I'd not have to revert to a SVR. Given your choice between a tracker where the rate is 0.29% lower than the best available to me or a fixed rate that is 0.61% worse than the one available to me in Northern Ireland, I'd definately stick with the tracker.

The previous advice to overpay your mortgage should be taken on-board. This is especially the case if you are approaching a LTV where better fixed rates are available (as you'll be able to go for them in the future).

20vt-rs

How about a product that tracks BOE rate and fixes after a set period? I've been looking into a new mortgage deal myself and tracker seems a good choice, however I have also stumbled accross deals that are tracker and then fixed rate. For example, tracker for 2 years on +2.69% of BOE rate, then fixed for 3 years @ 4.29%. Could be worth thinking about over a tracker?

thermos

I've been googling this a lot recently due to remortgaging. I'm not an expert but neither are the experts it seems. Reading past predictions shows anything can happen. For what it's worth I've gone for a lifetime tracker offset 2.39% above bbr and was considering a 10 year fix. I think bbr will stay low for the long term and only rise very gradually in very small increments. But I can only base that on what experts say. Some say 2016 or 2017 some say rates will fall even lower .If I get it wrong I will console myself knowing it is a gamble either way and I know I will be putting every single spare penny into my offset and it will hopefully balance rate rises. The worst you can do is end up with low rates for years and not save anything.

robatwork

20vt-rs wrote: »

How about a product that tracks BOE rate and fixes after a set period? I've been looking into a new mortgage deal myself and tracker seems a good choice, however I have also stumbled accross deals that are tracker and then fixed rate. For example, tracker for 2 years on +2.69% of BOE rate, then fixed for 3 years @ 4.29%. Could be worth thinking about over a tracker?

YBS by any chance?