Gaze into the crystal ball! :)

dosh1

I realise no-one can give a definite answer to this question but your views would be welcome.

The end of my fixed rate mortgage is 31st July. Currently on offer are 2 and 5 year fixed rates again however with everything that has happened over the past couple of weeks and the BOE speech last week, there is suggestion that mortgage rates will be reduced imminently.

If so any views on how much rates may drop by? Are we talking enough to make a real difference to monthly payments? Is it worth waiting and potentially paying a variable rate for August just to get a better deal?

Also, any thoughts on when this may happen? Do you think it is likely in July or August or thereafter?

Like most people, I don't want to jump into a 5 year fixed rate to then find if I had waited a month the rate would have been worth holding out for?

Your expertise is sought

amnblog

Fixed rates are not directly related to BOE base rates. They are based on the rates at which Bank's lend to each other.
If you see a rate you are comfortable with - take it.


Part of the anatomy of a fixed rate deal is you get the security because you are not taking the risk on rates rising.

MortgageMamma

You could look for a variable rate product with no early repayment charges, then if you see rates start to nudge upwards reassess the situation....you'd have to do a thorough calculation and include any fees

dosh1

Hi, Thanks for your response.

I am comfortable with the current fixed rate but I would be even more comfortable if the rate was likely to fall in the near future hence the reason for asking. Agree that a fixed rate deal provides security and reduces the rate of risk of increase. It would be good if I could get a better rate before I commit though.

amnblog wrote: »

Fixed rates are not directly related to BOE base rates. They are based on the rates at which Bank's lend to each other.
If you see a rate you are comfortable with - take it.


Part of the anatomy of a fixed rate deal is you get the security because you are not taking the risk on rates rising.

dosh1

Thanks for your response. Yes I have done a little research into variable rates but I must say I do prefer a fixed rate with the knowledge that I can afford it for xx years. I am happy to go with my current provider as their rates are fairly good however if there is a chance of the rates changing then it may be more beneficial to hold out for a month.

MortgageMamma wrote: »

You could look for a variable rate product with no early repayment charges, then if you see rates start to nudge upwards reassess the situation....you'd have to do a thorough calculation and include any fees

dimbo61

The BOE base rate is 0.5% and has been for the last 6 years.
So if they do cut the base rate it will only be to 0.25% as I think it would be difficult to go to 0.0%
How much difference that would make to a 2/5 years fix is anyone,s guess.
What rate are you looking at ?
How much are you paying now ?
Are you staying in the property for another 5 years at least ?
I had a 5 year fix at 4.74% a few years ago when the BOE rate dropped to 0.5% but we wanted the security and overpaid every month.
Your decision really

lydriver

is there a maximum amount that mortgage rates can go up whenever/if they increase

ie - as above, if you have a tracker but have the option of fixing...so are keeping an eye on the rates

could they jump up 2% or whatever they wanted to increase them by in a day, or would it have to be incremental rises at say 0.5% at a time? so you'd see them rising and be able to fix before they get too high

AnotherJoe

lydriver wrote: »

is there a maximum amount that mortgage rates can go up whenever/if they increase

ie - as above, if you have a tracker but have the option of fixing...so are keeping an eye on the rates

could they jump up 2% or whatever they wanted to increase them by in a day, or would it have to be incremental rises at say 0.5% at a time? so you'd see them rising and be able to fix before they get too high

There is zero chance of rates jumping by 2% in day, that would make Brexit look like a children's tea party. And the governor of the bank of England has said that when rates rise it would be slowly and in small increments, and at the moment they are liable to be going down anyway almost certainly as said by 1/4 %.

lydriver

I mean mortgage rates too tho

I've been watching Nationwide's rates, they came down by 0.25 a few weeks ago - would that likely be the amount they change every time or could they increase/fall by any number if they wanted?

JonMitchell

Dosh, my remortgage offer came through last Tuesday/Wed after the Brexit, which I had it fixed over 5yrs at 2.14%.

Although Carney signalled a possible cut in interest rates, I don't think (though I'm no expert) mortgage rate will move too much lower. On contrary, it might move up instead. My observation is based on what happen in US of Axx and Japan, despite their interest rates at 0, their mortgage rates are at ~4%.

In this uncharted time with Brexit, best to do something wise, ie hammer down something you are comfortable with in terms of payment and fixing it as long as possible.

Though if Michael Gove, aka the backstabbing Mr Bean, was to be elected, there might be chaos volatility in sterling pounds.......

Hope it helps a bit for you.

AnotherJoe

lydriver wrote: »

I mean mortgage rates too tho

I've been watching Nationwide's rates, they came down by 0.25 a few weeks ago - would that likely be the amount they change every time or could they increase/fall by any number if they wanted?

They can increase or decrease by 'any number' but if you think that Nationwides rates are broadly competitive right now, which by definition they must be or they either have no customers or be swamped, then what do you think even a 1% rise would do (which would be a 50% rise in the rates they charge, say from 2% to 3%).

Or to put it another way, whilst they are perfectly able to raise their rates on new mortgages or people on SVR to anything they want, they are constrained by competitive pressures to be offering roughly what everyone else does.