Fix your mortgage rate right now, says Bank of England’s Sharp

wotsthat

I'm fixed out to the end of 2018 (more or less) as I've not entirely bought into the message that rates won't increase for an extended period because the government or BoE don't want them to.

With 5 year rates at historic lows it doesn't seem too much of a risk.

Loughton_Monkey

M.Johnson wrote: »

You ideally want to fix your mortgage for as long as possible like 5years just before rates go back up.

But how can you know?

It would be annoying if you fix now and in 3 or 4 years the base rate is still 0.5%. Then just before you fixed term comes to an end, rates are back to more normal 5%+

Thing is, you can't 'know'.

There are two types of people:

1. Those who will think about it, analyse, make a judgement, and plump for it. With hindsight, that judgement may eventually prove to be either clever, or unfortunate.

2. Those people who don't even bother to think about it. With hindsight, they will eventually get higher rates.

My own view is that, on the whole, those in category 1 will do far better than those in category 2.

I wish I could go back and 'unwind' some of the judgements I made. But I can't. I only have myself to blame. But on the whole, I find that thinking about them (as opposed to not) gives a far better success rate.

BillJones

M.Johnson wrote: »

You ideally want to fix your mortgage for as long as possible like 5years just before rates go back up.

That's not quite right. If everyone believes that rate are going to go up at 1% per year then that's already priced in to your fixed rate. If you stayed floating, and rates did rise, but at less than exppectations, then fixing could have been the wrong decision.

purch

BillJones wrote: »

Short sterling futures are implying 55bp for March, 82 for December, and 1.61% for next december.

Short Sterling (or any other futures market) do not attempt to predict the future. They are a trading instrument and rarely settle, unless you have another position hedged against them.

IveSeenTheLight

I'm in the process of fixing my BTL's.
Not because I'm concerned about rising interest rates, but because the deal is too good to turn down.
I'm also releasing equity, but am wondering whether to pay down my own mortgage or invest further.

dryhat

"Releasing equity"

:rotfl:


classic debt-junkie language.

BillJones

purch wrote: »

Short Sterling (or any other futures market) do not attempt to predict the future. They are a trading instrument and rarely settle, unless you have another position hedged against them.

Er, thanks, I'm paid by the bank to trade them...

They are about as good an indication as anything as to where Libor is thought to be going, unless you've anything better to suggest.

IveSeenTheLight

dryhat wrote: »

"Releasing equity"

:rotfl:


classic debt-junkie language.

hehe, if you think so.
It's actually about maximising the investment.

Quite simply, the rate I am fixing for my BTL is 3.99%, whilst the self build is 5.39%.

It makes common sense at least to release the equity from the BTL and pay down the self build for the interest rate difference alone, let alone consider offsetting more mortgage interest against the profits.

Mind you, I've not thought about you having common sense from your other posts

dryhat

Fabulous. Well done.

mayonnaise

dryhat wrote: »

Fabulous. Well done.

Thanks for your input. You can go back to pressing F5 on the bitcoin exchange now. :rotfl: