Fixed or variable?

jemma123_2

Our 3 year fixed rate deal has come to an end and for the last 2 months we have been paying the variable rate which is around £640 for a £100000 mortgage.

I am about to make an appointment with them to see if a can get a better deal and also phone around a couple of brokers but am unsure whether to go for another fixed rate or stick with the variable. We could afford another 0.5%rise in interest rates but would struggle after that.

I know nobody can predict what will happen to interest rates but can anyone please advise what they would do in my situation?

hambrook

Personally I think interest rates are near a ceiling. YES the inflation figure was high in March but this was mainly due to retailers artificially raising prices in time for the Easter sales (just shows how gullable the UK consumer is in believing DFS adverts!) So it is likey that there will be another 0.25% rise this month as a result, but here's my crystal ball moment.....

- Lots of people took mortgage deals when rate were low. Typically these are 2 or 4 years deals. This will all start to expire
- Any Bank of England interest rate rise takes 6 months to hit the average Joe's spending so there are a lot of people catching colds this summer
- The housing market will not crash. Our economy is too strong. Anyone that says otherwise is living with there parents or stuck in 1980s / 90s mentality.

My prediction: With political changes this summer creating some uncerntainty, property prices still marching on, housing supply not meeting demand, wage settlements of less than 4%, alot of people have debt chasing 0% cheap credit cards (which are now becoming few and far between), panic property buying for the last 5 years, remortging to buy holidays and new cars (have u noticed how many new cars)...... I think it is going to hit the UK in 1Q next year. So interest rates next year will probably fall as the economy dips. NOT crashes, just performs some re-adjustment. So if you fix now, dont do it for 3 years. Maybe capped.

Also use a broker to calculate how much the mortgage fee saves you when taking a capped or fixed deal. Fees seem to be in the thousands rather than the hundreds. We were very satisfied with L&C Mortgages.

These are just my thoughts, hope it helped.

KTF

My fixed rate is up for renewal in September and I will probably go for a tracker as they seem to be lower than fixed at the moment and I think rates will go down from the end of this year so (hopefully) it will be cheaper than going for another fixed.

Of course it could all change but thats my thinking at the moment!

MortgageMamma

Fixed rate - it you can only afford another 0.5% increase in rate you would be mad to go on a tracker - if you do choose to take a tracker make sure it is one with no early repayment charges

Gorgeous_George

I love these old threads.

Don't you?

Absolutely barking mad to choose a tracker 18 months ago.

:rotfl:

GG

KTF

And dont I just regret not going for the Woolwich lifetime BoE + 0.18% tracker that was on offer at the time and getting the Halifax 5.79% 5 year fix instead

Ah well, was the right decision at the time but a crystal ball would have been wonderful...