Changing mortgage - what fixed period should I go for?

aetbaar

Thanks for the reminder - I am currently on a rate of 3.39 and so unless rates went up to 2.5% I would be significantly better off and if they did go to 2.5% I would probably secure a fixed deal well before that when they started rising

I appreciate what is being said about certainty and it's hard to predict what will happen I guess it just comes down to personal attitude to risk and circumstances

I will make a decision over the weekend but the two year fixed or variable seems best as by early 2017 I think I can the renew and rates should be clearer in terms of where they are going and if they are going up I can fix for a further 4/5 years

racing_blue

Southend1 wrote: »

How big is the mortgage?

I reckon about £300k, if the monthly interest differs by £150 with those interest rates?

getmore4less

amnblog wrote: »

This is generally not about the rates it is about:


1. Whether you want the stability of payment
2. How long it suits you to have that stability for


What is going on it your world that makes knowing where you are with your mortgage payments key to you?


If you don't need the stability of payment and are just trying to pay as little as possible then perhaps a tracker might be worth considering.

You can self manage stability of payments you don't need a fixed rate to do that.

getmore4less

aetbaar wrote: »

Thanks the tracker rates are even better at 0.69 above base so currently 1.19 and as long as rates don't go above 1.25 by march 2017 it could work out better as I don't think rates will rise for another year so I would have 12 months at a low rate and then 12 months at the same as the 2 year or 3 year fixed rate after which I could renew and get another deal

Very tempted by the tracker and can't see rates rising until inflation stabilises and even if it rises it will be gradual

Do the numbers based on the same payment, see how much you owe in 2,3,4.... years based on various rise scenario.

You may be surprised by how much this fixed could cost you.

aetbaar

I agree as to be honest I can manage my payments now at a rate of 3.39% and could probably manage them of they were 4% but this is about trying to minimise the amount I pay over the next 2 years based on information to hand

I have decided on 2 year variable

Rate is base +0.69

My decision is based on information on economy and conversations I have had with people I know including mortgage brokers , city analysts , and people that have been around longer than I have to be able to understand the economy and patterns

It is widely publicised that rates are unlikely to rise until Q1 2016 and the rises will be gradual so maybe it goes to 0.75 and then 1 and maybe at best pushes 1.25 by end of 2016 when I will be in a position to renew again in early 2017 - that way I see I should get 6-12 months of 1.19% 3-6 months at 1.44% 3-6 months at 1.69% is hopefully the time being at 1.19% will outweigh the rate I pay if and when rates go up to 1%

From what I have seen inflation is 0 and we are likely to get deflation, gdp is low, global exonomy is in a mess, a new government is coming in we have a huge trade deficit and so the likelihood of a rate rise are going to happen after some time and slowly

That's what my thinking and research has led me to anyway - I hope others also find this useful who are in a similar predicament to me

Thrugelmir

Let's see what the Fed does. Appears to be only a matter of time before the first small incremental rise. Alternatively the Fed could also start selling long dated bonds back into the market to reduce liquidity. QE has served it's purpose. Now the real work starts.

bigheadxx

Im not ruling out a cut. Lifetime trackers Santander is 2.39 %, look pretty decent with the ability to switch quickly if things look bad.

aetbaar

http://www.theweek.co.uk/63024/interest-rates-as-likely-to-fall-as-to-rise

Jhoney_2

bigheadxx wrote: »

Im not ruling out a cut. Lifetime trackers Santander is 2.39 %, look pretty decent with the ability to switch quickly if things look bad.

Is that better than the 2yr tracker for 1.39?

This stuff makes me dizzy - I am just trying to understand and whilst you may be right, I cannot work out why or how you got there!:o