📨 Have you signed up to the Forum's new Email Digest yet? Get a selection of trending threads sent straight to your inbox daily, weekly or monthly!

Interest Rate Concerns

The papers this morning were indicating that the Bank of England is considering a 0.5% increase in the base rate.

I'm tied into a 2yr discount mortgage until August 2008 but would switch to a fixed if it were at all possible. There weren't any viable fixed rate mortgages due to poor market conditions last August when I remortgaged.

My redemption penalty is approximately £9K making a switch to fixed rate unfeasible now unless there is a clever way out of the penalty.

With a £250K mortgage to my name, each .25% increase in interest rate costs me £50 extra each month. If the BofE increases the rate to 5.75%, it will mean my mortage is costing £250 extra per month since last September.

I'm worried what this might increase to over the next 15 months.

Any clever ideas of ways to switch without incurring the penalty?

Comments

  • MortgageMamma
    MortgageMamma Posts: 6,686 Forumite
    Part of the Furniture 1,000 Posts Combo Breaker
    No I'm afraid no clever ways out - however, you are on a discount mortgage not a tracker which means there's a small chance that if rates do increase then your lender will not alter the SVR
    I am a Mortgage Adviser

    You should note that this site doesn't check my status as a mortgage adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
  • Gooner71_2
    Gooner71_2 Posts: 27 Forumite
    Its pretty much the same as a tracker in that its always .29% below the base rate.
This discussion has been closed.
Meet your Ambassadors

🚀 Getting Started

Hi new member!

Our Getting Started Guide will help you get the most out of the Forum

Categories

  • All Categories
  • 351.4K Banking & Borrowing
  • 253.3K Reduce Debt & Boost Income
  • 453.8K Spending & Discounts
  • 244.4K Work, Benefits & Business
  • 599.7K Mortgages, Homes & Bills
  • 177.2K Life & Family
  • 258K Travel & Transport
  • 1.5M Hobbies & Leisure
  • 16.2K Discuss & Feedback
  • 37.6K Read-Only Boards

Is this how you want to be seen?

We see you are using a default avatar. It takes only a few seconds to pick a picture.