BEBR predictions? Fix or track?

cralol

Hi,

My mortgage deal (2yr 1.29% fix) is up at the end of Feb 2023 and I probably need to act now and grab a new deal. I should really have done this last month but I was sleeping.

With Bank of England Base Rate (BEBR) sitting at 2.25%; and presumably about to go up 0.5pc in Nov; and another 0.5 in Dec - we're presumably going to be hitting 3.5-4% base rate quite quickly.

As a result, the best rates around right now are basically 4.1% for a 5yr fix or a jump on a BEBR+0.5% tracker and ride it out.

My gut feel is that rates will go up for 6-12 months or so and then drop back again, so fixing for 5yrs at 4.1% feels slghtly like a panic-move which could potentially lead to higher overall cost over the 5yrs when/if BEBR drops off again.

Anyone thinking of going on a tracker and riding their luck?

What are folks views on discount mortgages vs. tracker? There seems to be some very cheap discount deals but I can't get my head around what stops the lender cranking up the rate as their own whim as soon as I sign up.

I'm keen to hear different viewpoints please.

mose_2

4.1% seems like a good deal atm. I’ve only been looking for about a week and they are shooting up nearer the 5% mark. The best 2 year tracker I can find was 0.70 over base. 

housebuyer143

Where are you finding this 0.5% base rate tracker? 

Smithcom

cralol said:

Hi,

My mortgage deal (2yr 1.29% fix) is up at the end of Feb 2023 and I probably need to act now and grab a new deal. I should really have done this last month but I was sleeping.

With Bank of England Base Rate (BEBR) sitting at 2.25%; and presumably about to go up 0.5pc in Nov; and another 0.5 in Dec - we're presumably going to be hitting 3.5-4% base rate quite quickly.

As a result, the best rates around right now are basically 4.1% for a 5yr fix or a jump on a BEBR+0.5% tracker and ride it out.

My gut feel is that rates will go up for 6-12 months or so and then drop back again, so fixing for 5yrs at 4.1% feels slghtly like a panic-move which could potentially lead to higher overall cost over the 5yrs when/if BEBR drops off again.

Anyone thinking of going on a tracker and riding their luck?

What are folks views on discount mortgages vs. tracker? There seems to be some very cheap discount deals but I can't get my head around what stops the lender cranking up the rate as their own whim as soon as I sign up.

I'm keen to hear different viewpoints please.

Not sure I fancy 'riding my luck' on my ability to pay my mortgage !!!

brownbagsFTB

Yes I am hedging my bets too. I have a whole year left of my first mortgage fix so it’s not possible to lock down another deal now (£3000 ERC). I hope you’re right about the interest rise being temporary, I’m putting all of my faith into that being the case as the alternative is frightening. I’m going to pay down as much short term debt as possible to give me more disposable income by September when I’ll likely go on a tracker for a few months and try to ride it out. It is what it is but good news is that in the press today it seems like the Conservative party have lost faith in Truss, so let’s hope she and kwasieconomics are ousted before they cause any more reckless damage to the economy 🙏🏻

Maka344

brownbagsFTB said:

Yes I am hedging my bets too. I have a whole year left of my first mortgage fix so it’s not possible to lock down another deal now (£3000 ERC). I hope you’re right about the interest rise being temporary, I’m putting all of my faith into that being the case as the alternative is frightening. I’m going to pay down as much short term debt as possible to give me more disposable income by September when I’ll likely go on a tracker for a few months and try to ride it out. It is what it is but good news is that in the press today it seems like the Conservative party have lost faith in Truss, so let’s hope she and kwasieconomics are ousted before they cause any more reckless damage to the economy 🙏🏻

This is now also our plan. We have an ERC of £16.5k until next Feb 23 and then £10k until Feb 24. We have around 16 months to run on our 1.3% fixed - we will clear down all other debt in readiness and then track if rates are as high as predicted by then. Hopefully, when things then start to turn, our payments should reduce again. 

IAMIAM

I think most people will do this where it’s needed. Try to go for a discounted or tracker that has minimal ERC (0.5-1%) with free legals. I am doing just this in January. See what happens over next year. I want to move, but also want to have a cheap mortgage when I do! Here’s hoping!

IAMIAM

I would rather pay 4% on a tracker instead of 6/7% on a fixed for 5 years.