TSB fixed rates.

tony3619

Hello. 

My situation is basically that my current deal ends in May. I'm keeping an eye on interest rates as Im hoping deals on fixed rates stay below 6% by this time. That's my upper limit before it becomes unaffordable. 

Does anyone know what criteria TSB use to increase fixed percentage? They seem to raise it at random times and dont reflect base rate rises. 

housebuyer143

tony3619 said:

Hello. 

My situation is basically that my current deal ends in May. I'm keeping an eye on interest rates as Im hoping deals on fixed rates stay below 6% by this time. That's my upper limit before it becomes unaffordable. 

Does anyone know what criteria TSB use to increase fixed percentage? They seem to raise it at random times and dont reflect base rate rises. 

Lenders use lots of factors to set rates, swap rates, base rate, market predictions, what the competition is doing. There isn't any way you can guess and it doesn't follow and set pattern. At the moment lots of lenders are withdrawing their 2 year fixed rates from the market..  could be a number of reasons why, but it's likely down to market volatility.

ACG

I have seen the odd rate reduction over the last month or 2. Nothing major, but it seems to just come down to how busy they are. 

A lot of people are remortgaging at the minute due to rates going up. I wonder if things may start to slow down soon at which point lenders may look at reducing rates... Just a thought (but I dont know). 

tony3619

ACG said:

I have seen the odd rate reduction over the last month or 2. Nothing major, but it seems to just come down to how busy they are. 

A lot of people are remortgaging at the minute due to rates going up. I wonder if things may start to slow down soon at which point lenders may look at reducing rates... Just a thought (but I dont know). 

Would you say fixed rate deals are likely to top 6% by next year? 

housebuyer143

tony3619 said:

ACG said:

I have seen the odd rate reduction over the last month or 2. Nothing major, but it seems to just come down to how busy they are. 

A lot of people are remortgaging at the minute due to rates going up. I wonder if things may start to slow down soon at which point lenders may look at reducing rates... Just a thought (but I dont know). 

Would you say fixed rate deals are likely to top 6% by next year? 

Fixed rate deals are around 4% or more as standard now, so I can certainly see 6% fixed rate deals in the near future, but I am not psychic. If we go into a bad enough recession the base rate could go back down along with the rates... a few lenders have reduced fixed rates recently to get more business. 

K_S

tony3619 said:

Hello. 

My situation is basically that my current deal ends in May. I'm keeping an eye on interest rates as Im hoping deals on fixed rates stay below 6% by this time. That's my upper limit before it becomes unaffordable. 

Does anyone know what criteria TSB use to increase fixed percentage? They seem to raise it at random times and dont reflect base rate rises. 

@tony3619 I don't know how big the ERC is on your TSB fix, but one option to put a floor on the rate might be to consider getting an offer from a lender that offers a 6 months validity from offer and takes you to late-March. If your TSB fix is ending on 31 May, you should be able to pick a new fix (product transfer / PT) on 01 March.

So on 1 March you can compare the two options - remortgage to another lender plus ERC Vs TSB PT avoiding ERC.

An even better option may be to get a remortgage offer from a lender that does a 6+3 months validity which potentially gets you past the ERC period and locks in a current mainstream rate. If you have a broker I would recommend dropping them a note.