mortgage rates before BoE increase

ggloria007

Hi there,

I was reading Martin's article "UK interest rates likely to rise in 2 weeks PROTECT YOURSELF BEFORE IT HAPPENS" yesterday and did a bit of a homework this evening:

We have an outstanding mortgage for aprox 80k and a house worth around 500k. (pls do not get too excited it is a simple house but in Cambridge) We have a mortgage with HSBC - lifetime tracker 1.49% above Bank of England Base rate (currently 0.25+1.49=1.74%). In previous years I felt quite good that we are on a such low tracker 0 but having seen that there are now on the market 2-3 year fixed mortgages for less than 1% I am thinking whether it is a time for change. In my simple calculation the product fees are usually 3x our monthly payment and this was one of the reasons we continue with this mortgage. I am really not skilled to create a spreadsheet to figure out if the switching was good enough. However, when seeing the SVR rates I have a 'gut feeling' we are on a good rate. Please do not shoot me as I am ignoring the maths and calcs and using my gut feelling... (I am overall good with money).

Well, I am interested if any of you could help me. We have a mortgage for around 11 years. It is worth of mentioning that this tracker has an option for overpayment (unlimited) and we are using this regularly by overpaying each month (if the interest rates rise we might not be able to to this).

I am curious to hear what the smart money guys can advise.
Thank you very much.
ggloria007

amnblog

There are a few 2 year fixed rates in the early 1% range.

By the time you pay the product fees it will work out closer to 2% over the two years.

If you fix and rates don't move, or don't move sufficient to make the fixed rate less cost effective, Martin won't be giving you your money back and time soon.

Move to fixed if you are concerned about the potential escalating cost of Base Rate rises. Not because you want to be on the right side of a guess.

ggloria007

thanks for your reply!
i assume I should stay with my 1.49% above BoE base rate - life trucker with option for unlimited overpayment...
yahooo

amnblog

Mine was a general comment. Not advice to yourself.

I don't know your circumstances so cannot say what is best for you.

IAmWales

ggloria007 wrote: »

thanks for your reply!
i assume I should stay with my 1.49% above BoE base rate - life trucker with option for unlimited overpayment...
yahooo

If you're repaying within a year it's a great deal. If you're going to take ten years and interest rates go to 2%, 4% and so on it's pretty ropey.

No one can tell you what will happen to interest rates. The future is far too uncertain to make even an informed prediction.

gingerdad

we are in a similar position 1.1 above base - but don't see the point of moving as its for the lifteime so rates would need to rise quite a lot to get an fees and charges back and in two years you'd need to do it again - but we only have a short time left so maybe in a different position

ggloria007

thank you all for your viewes!
we have 10 years left! so I asssume we will need to look again next year.
I think the interest rates will not go too heigj re: brexit and uncertainty... however if we need to pay EU all those billions the goverment might raise the interest rate to gather the money...
thanks