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Mortgage fixed rate ending!

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A bit of advice needed please! Out fixed rate Mortgage of 6% which we have been paying for 5 long years comes to an end on 31st July. It with come down to 2% above base rate so with be 2.5%. What do I do? Do I fix it again at 4% which my current lender is offering?

Comments

  • marathonic
    marathonic Posts: 1,786 Forumite
    Part of the Furniture 1,000 Posts Combo Breaker
    The banks would LOVE you to fix again because your 2.5% rate is so good.

    DEFINITELY stick with the 2% above base rate product but continue to pay what you're currently paying at 6% (assuming it's affordable).

    This will allow you to decrease your mortgage balance and minimise the impact of any rate rises down the line.

    For a 4% product to be worthwhile, the BOE base rate needs to rise above 2% which most people agree won't happen for at least 2-3 years and possibly longer.
  • gloria22
    gloria22 Posts: 71 Forumite
    Part of the Furniture Combo Breaker
    Thanks, thats really god to know! No wonder my current lender is pushing us to fix it!!
  • dimbo61
    dimbo61 Posts: 13,727 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    One of the papers today stated that rates could stay low 0.5% for the next 5 years
    But they also said Man U would win the league this year !!!!
    If you have no other debts then stay on the Tracker deal and overpay
  • nuttybabe
    nuttybabe Posts: 2,299 Forumite
    Thank you so much. Our fixed rate is coming to an end and we can either go on the 2.5% rate saving us £140 on waht we are paying now or the cheapest fixed rate for 3 years which will be an extra £30 more a month than we are paying now and will be 5.89%.

    So I think base rate will be best :D
  • dimbo61
    dimbo61 Posts: 13,727 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    Stay on the BMR at 2.5% and
    OVERPAY OVERPAY OVERPAY and dont forget if you can OVERPAY !!
  • Thrugelmir
    Thrugelmir Posts: 89,546 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    dimbo61 wrote: »
    Stay on the BMR at 2.5% and
    OVERPAY OVERPAY OVERPAY and dont forget if you can OVERPAY !!

    Wise words. As interest rates won't stay low indefinately.
  • kidmugsy
    kidmugsy Posts: 12,709 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Combo Breaker
    I disagree. Go onto the 2.5% and save the reduction in payments in a Cash ISA each at (say) 3.1% or a bit more. Use that cash, or some of it, to pay down the mortgage only when the mortgage interest rate exceeds the rate on your ISAs.
    Free the dunston one next time too.
  • dimbo61
    dimbo61 Posts: 13,727 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    If you get used to pay £XXXX amount each month for your mortgage payment then thats the MORTGAGE
    Save extra into cash ISA,s each year £5640 per annum now that is a MSE person.
    By keeping the payment static you wont notice if mortgage rates do go up as you are already overpaying
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