Fix or not

john_white

Hi all,

After some opinions.

Currently on SVR at BoE +2%.

Can fix at either 2.49 or 2.59 depending on LTV for 4 years with £900 fee.

With a growing family I like the idea of fixing for 4 years for £225 a year. At the end of the 4 years reckon on being at 50% LTV or lower so still a good place to be if rates did go up.

The negatives, if rates did go up the base rate on the new product is currently 3.99% and ERP of 4% if we had to sell for any reason in those 4 years (no plans to).

I am thinking the only real gamble is will rates go up in the next 4 years that would offset the £900 fee.

What would you do? Am I missing anything?

HappyMJ

I'd stick...only because I don't like the revert rate of 3.99%. I'd rather be on a +2% tracker for life.

The ERP also puts me off.

If rates did go up by 1% you would be paying 2.59% followed by 4.99% or if you stayed as you are you would be paying 3.5% all the way through.

I don't think it's worth it myself.

john_white

Great thanks, never considered it was effectively a 2% tracker for life.

I was thinking in 4 years I could switch again, have a better LTV and hopefully still get a lower rate, but thats the gamble.

tunnel

Where rates will be in 4 years is anyone's guess but if you look at what 5 year fixes are doing, around the 3-4% mark depending on LTV, it will give you an idea of where the banks think the rates will be heading. If it was me personally, i'd stick with the 2% above base as HappyMJ suggests, plus there's no fees and you can overpay what you like(at least the £225 that you were considering as a fee)