To remortgage or not?

Baloocifur

Hi MoneySavingExpert forum,
newbie first poster & I'm after people's advice and perspectives.

I'm currently tracking the Bank of England base rate plus 1.5%, so I'm currently paying 1.75% on a variable rate.

If the base rate does rise 0.25%, I can cope with that as I was and have been since my fixed-rate ended 6 years ago.

What worries me is that all the new mortgages have a standard variable rate of well over 3% so any short term or mid term fix be negated by a high rate increase after the fixed term ends.

The Dilemma is if I opt for a long term fixed now I'm looking at 2.49 to 3% to fix. What are the chances that the interest rates will rise and rise to at least 1.5%

Regards
Paul

amnblog

Baloocifur wrote: »

What are the chances that the interest rates will rise and rise to at least 1.5%

A question you cannot expect a valid answer to Paul.

The way to look at fixed rates is that they will limit the damage if rates do rise.

Trying to pay the least possible by guessing whether or tracker or fixed rate will work out less overall is a gamble that some win and most lose.

Suited72

The interest rate cannot rise. The UK government would not be able to service it's own debt.
The government is still borrowing around £200 million per day.
A 25pt increase may happen as a token, but more than likely the pattern across other indebted western countries is that interest rates have gone negative.

The boe need to keep the possibility of a serious rise as plausible. The truth is, it isn't possible for the boe to raise rates by more than 25pt. It was ridiculous of Martin to suggest 5.75 as a norm and that there be any chance to return to anywhere near that figure is zero.

Suited72

Denmark, Sweden, Switzerland and Japan all currently have negative interest rates.

marsman802

Suited72 wrote: »

The interest rate cannot rise. The UK government would not be able to service it's own debt.
The government is still borrowing around £200 million per day.
A 25pt increase may happen as a token, but more than likely the pattern across other indebted western countries is that interest rates have gone negative.

The boe need to keep the possibility of a serious rise as plausible. The truth is, it isn't possible for the boe to raise rates by more than 25pt. It was ridiculous of Martin to suggest 5.75 as a norm and that there be any chance to return to anywhere near that figure is zero.

Martin hasn't done that to be fair. No one knows what the "new normal" is. Marc Carney quoted circa 3% once but who knows.
But the OP above is just one example of people becoming VERY accustomed to sub-2% rates.