Shall we fix or not?….opinions wanted pls to help us decided

kippers

We have £39,500 left o/s on our mortgage and our fixed rate is due to end on 31/12/22.  We suspected the interest rate would rise so three days ago my dh applied for a new mortgage and has been offered 3.29% fixed for three years (we are hoping to pay off at the end of 3 years)…..however we will incur a penalty of £148 if we take on this mortgage as it is before our fixed rate ends on 31/12.  

We think it would be better to accept this offer rather than wait until October when we wont incur any penalties…..this is because the bank have already today put the interest rate for the same mortgage up by half a percent (3.84%) which works out at another £10 per month already, and maybe it will rise further before October?

So can we have your opinions…..do we go for it, or do we wait till October and see what is available without incurring a penalty with the risk of a higher interest rate?

sol2017

I might be missing something but it seems a pretty simple decision to me.

Penalty/ERC: £148
Increased mortgage rate £10 x 36 months = £360
Interest rates are only going upwards this year.

Is there anything else to consider?

kippers

sol2017 said:

I might be missing something but it seems a pretty simple decision to me.

Penalty/ERC: £148
Increased mortgage rate £10 x 36 months = £360
Interest rates are only going upwards this year. 

Is there anything else to consider?

I keep reading that historically interest rates drop when you go into a recession ?

yessuz

kippers said:

sol2017 said:

I might be missing something but it seems a pretty simple decision to me.

Penalty/ERC: £148
Increased mortgage rate £10 x 36 months = £360
Interest rates are only going upwards this year. 

Is there anything else to consider?

I keep reading that historically interest rates drop when you go into a recession ?

yes, in generally. but it will take at least 1-2 years until that happens. UK is not in recession YET, but will hit in Q4. then it will take a year or so to change rates

simon_or

kippers said:

sol2017 said:

I might be missing something but it seems a pretty simple decision to me.

Penalty/ERC: £148
Increased mortgage rate £10 x 36 months = £360
Interest rates are only going upwards this year. 

Is there anything else to consider?

I keep reading that historically interest rates drop when you go into a recession ?

That may or may not happen over the the next couple of years, but the likelihood of the trend changing within the next 3-4 months is very low imho.

IAMIAM

just hold the offer until Dec and decide then? The offer is valid until then?

kippers

IAMIAM said:

just hold the offer until Dec and decide then? The offer is valid until then?

The offer is only valid for two weeks