Applied for Fixed rate but solicitor says dont as rates will go down by next yr??

gabyjane

Hi well we recently applied for a fixed rate mortgage and i'm still gald we have kept with it, we haven't started paying it yet but the rates went up not long ago didnt they and we had secured ours so we would be worse off i think. I think like you said it's your first home and you have lots of other things to worry about and pay out for, it's nice to know exaclty what you are going to pay wether the rates decrease or not, we are not prepared to take the risk! Have a word with your broker if you are unsure he's there to advise you and you don't have to change it's whatever you feel comfortable with! Good luck.

daelaan

for me, it all comes down to how big your monthly repayments will be to start off with whether fixed OR variable. our new place has a much bigger mortgage on it than last time - our first home had a stupidly low repayment on it so i could easily afford the repayments to go up on a variable.

the new place we're buying? out of the question. for the time being, it'd only take a few rises and we'd be stuffed. fixed rate all the way as far as im concerned, the longer the better.

tomstickland

He did say its up to us and that he shouldnt really be getting involved anyway.
He said he hasnt got a crystal ball so cant guarantee, but in his opinion thats what will happen.

He's only given you his opinion.
My opinion is that a fixed might be better if you can only just meet the repayments. Having said that, my opinion is that being able to only just make the repayments is itself not a good position to be in.

Fixed or variable is a gamble. There are four outcomes.
fix and rates rise - good, you make a saving
fix and rates fall - you miss out on a saving
variable and rates rise - bad, you have an increase
variable and rates fall - good, you make a saving

so the difference is between missing a saving versus suffering an increase.

I took a fix last year because I reckoned that rises wouldn't fall any more.
If I was taking a mortgage today then I'd probably take a variable. I can easily afford any rises though.

poppy10_2

He is talking out of his @$$, everyone expects rates to be higher this time next year.

movilogo

At the end of the day, it is ultimately your decision.

My mortgage broker has also advised for taking up a discount tracker. I am a FTB, and I'm most likely to go for tracker. I know that if IR rises 1-2% still I should be able to pay the mortgage.

I won't say your solicitor is speaking !!!!!! as he just advised you.

hethmar

I have had a fixed rate mortgage since 1992 - just after we had all been shocked into rates of up to 15%. Yes, 15% - I guess a lot of youngsters on here wont remember that sort of interest rate! People were having to give in their keys and walk away from their homes because they simply couldnt afford the payments. And remember, houses back then were MUCH cheaper than now.

Ok, some times Ive paid a percent or two over the variable rate and thats annoying but I am still glad that we have kept fixed rates since that time because we KNOW we can afford the payments we are fixing at. I wouldnt like to see what would happen if the rates rose to 15% again on the size of mortgages people have nowdays. (And no, none of us believed that sort of increase was possible then either).

You do what you feel safe with. Have you looked at capped rates where there is a ceiling to the rate but if the rate falls so do your payments?

HenryWeston

hethmar wrote: »

I wouldnt like to see what would happen if the rates rose to 15% again on the size of mortgages people have nowdays. (And no, none of us believed that sort of increase was possible then either).

Rates dont need to get to 15%, because like you say mortgages are much much bigger this time.

going2die_rich

Since when is a solicitor trained as a financial advisor?

I think yoru solicitor is likely to be right that by the end of 2008 rates will be looking to at least stop going up, whether they go down though is another matter.

Suggest you see a financial advisor if you are uncertain about things, rather than just taking your solicitors word for it.

CB1979_2

poppy10 wrote: »

He is talking out of his @$$, everyone expects rates to be higher this time next year.

I don't

PosterBoy77

There is alot of rubbish being peddled by the finacial experts now who claim that rates will be coming down and at the same time tell us the finacial system is healthy, yet very few of them predicted any of the problems in the financial markets.

These "experts" are loosing sight of the fact that the BOE is targeting inflation two years hence. At the moment they feel that rates of 6% may be needed for that. Even if the current turmoil in the finacial markets puts a brake on rate rises, the rates are likely to be remaining at the current rates for a fair while, there is no data to suggest that rates can be lowered without breaching the inflation target.

You should do what you are most comfortable with.