should I go on the base rate?

bob8864

Hi ...my situation is that my 5 year fixed rate deal is coming to an end and the rbs has offered me a 2 year fixed rate at 4.39% with a £995 fee , this is the only deal they have offered and as my wife has had to give up work I don't think I would get a mortgage with another company. My question is that when the deal ends I would go from 4.39% to 4.00% which I assume is their base rate so should I ignore their deal and go straight on to their base rate. I would save about £70 a month and not have to pay out £995.......it just seems to me to be a risky thing do, I guess it depends on what the Bank of England do with the base rate in the next 2 years......any advice welcome, thanks in advance Bob

Thrugelmir

bob8864 wrote: »

I would save about £70 a month and not have to pay out £995.......

Use the £70 to overpay the mortgage. Reducing the balance will save you interest along with reducing the debt owed.

ScotlandM

Crystal balls are second shelf on the left beside the bread.
10 minutes on google shows a wide spread belief that rates will stay at 0.5% for the short term before rising possibly 2015. The sheer volume of base rate/tracking mortgages makes it more secure. If the rate does go up so many will be effected and it will hurt the economy. Of course... if the economy picks up quicker then the rate will pick up quicker.

Put the 995 spread over the 24 payments and work out what 'working' rate your are being offered.

For me you're saving approx 0.39% (but will go up after 995 is included). If rate goes up it goes up by 0.5. If BOE rate goes up after 20 months you're still on a winner.

The intital information you got with the first mortgage should say what rate you go onto (not a % but the base rate or the SVR or whatever the company was using at the time).
If you want to do it by votes i would stay on the base rate.

ScotlandM

What time does Martin's board use? GMT not BST?