Get out of fixed rate?

tony3619

My Fixed rate of 1.69% ends may 31st 2023. I have 2 options ....

1. Pay £780 ERC to go onto a deal at 4.39% making payments jump from £270 - £380ish 

2. Ride it out until May and hope rates stabilise by the time I get a new deal and risk rates being 6-8% at Costs being more 550-600

What would you guys do? 

housebuyer143

tony3619 said:

My Fixed rate of 1.69% ends may 31st 2023. I have 2 options ....

1. Pay £780 ERC to go onto a deal at 4.39% making payments jump from £270 - £380ish 

2. Ride it out until May and hope rates stabilise by the time I get a new deal and risk rates being 6-8% at Costs being more 550-600

What would you guys do? 

I would not be fixing right now. The markets are all over the place especially due to the crazy budget on Friday. 
In your shoes I would stick it out, but who knows the future. 

ACG

Find a new lender who has a 6 month offer period. Keep your 1.69% until then, your mortgage offer will just sit and wait. 
If rates come down, you can find a new deal. If they do not, you have something secured. 

You might need to pay the ERC but if rates have not gone up you might decide to re-apply closer to the time to avoid the fee. 

tony3619

ACG said:

Find a new lender who has a 6 month offer period. Keep your 1.69% until then, your mortgage offer will just sit and wait. 
If rates come down, you can find a new deal. If they do not, you have something secured. 

You might need to pay the ERC but if rates have not gone up you might decide to re-apply closer to the time to avoid the fee. 

It's abit complicated but for arguements sake what if applying for a deal for 6 months wasn't available? 

ACG

A few lenders have 6 month offer periods. If you are limited in your options due to personal circumstances, that does make it a little trickier. I suppose you could just apply for a mortgage offer with 3 months and just see how things play out between now and christmas. 

tony3619

ACG said:

A few lenders have 6 month offer periods. If you are limited in your options due to personal circumstances, that does make it a little trickier. I suppose you could just apply for a mortgage offer with 3 months and just see how things play out between now and christmas. 

Would you not advise paying the ERC to get out currently?

The question/risk is whether fixed rates are likely to have risen and dropped below 4% by May 2023. I need a crystal ball! 😂

SusieT

Very difficult one, and it will take a crystal ball to know whats going to happen with rates after the announcement last Friday. I have a horrible feeling rates will go up by at least 1% in November and probably again the next meeting, but that is just me and we really have no idea how BOE are going to react. There is supposed to be a speach or talk from BOE this evening, so that may give more idea of their thinking. 
Could you book a rate now with your provider for 6 months time, and then decide later?

tony3619

SusieT said:

Very difficult one, and it will take a crystal ball to know whats going to happen with rates after the announcement last Friday. I have a horrible feeling rates will go up by at least 1% in November and probably again the next meeting, but that is just me and we really have no idea how BOE are going to react. There is supposed to be a speach or talk from BOE this evening, so that may give more idea of their thinking. 
Could you book a rate now with your provider for 6 months time, and then decide later?

Yea I definitely agree mortgages are on the up atleast until the new year. I guess it's more where and when rates will settle at in the mid term. The way people are reacting today the base rate is going up to 8% which seems rediculous. It's probably almost unaffordable to most mortgage holder's. Definitely feel like I'm playing in a casino at the moment!