How long are we extending for?

andypa1

Hi all,
I'm having a real headache at the moment, having predicted correctly and had a variable rate for the last two years, getting in just before the last drops I'm now ready to remortgage and the world is a very different place.

I'm going for fixed this time, and hoping to lock in before the predicted August rate change by the bank of england.

I know it's impossible to predict, including the potential fall out of brexit (if it happens), but how long term is everyone fixing? 3 years, 5, 10!?

Cheers,
Andy

kingstreet

Any August (or near future) rate rise has already been priced-in to new mortgage products available today.

Lenders don't pull/launch products in response to a base rate change. That has already happened due to market sentiment.

ACG

I get the impression rates might not rise in August.
At the last review, lenders seemed almost 100% certain the base rate would go up and were increasing their rates about a month ahead of time. They then dropped them down a little, I have not really seen rates going back up.

I suppose the point I am making is that lenders typically make their move well ahead of the actual change being announced.

Anyway, 2 and 5 year fixed rates appear to be more or less the same at the minute. Why not compare the 2, 3, 5 and 10 year fixed rates and go from there.

Do you plan on moving within a certain period? If so, maybe take that in to account. Are there any other life events that might impact whether you stay or move or make overpayments/want a payment holiday etc?

andypa1

thanks for your helpful replies.

Yes, we're likely to move in 2 to 3 years, but Nationwide say we can just keep the existing rate and apply it to the bigger mortgage to avoid paying an early repayment.

Think I'm going on 3 year, but it's all just guesswork really isn't it, who knows what will happen with brexit etc.

ACG

You "can" move the mortgage, but if you do not fit their criteria/affordability/credit profile at the time you would have to pay an ERC to leave the deal. There is also no guarantee their deals would be competitive at that time.