Husband and I disagree - fix or discount

joanna3293

london21 said:

joanna3293 said:

london21 said:

Personally prefer fixed to variable for some certainty and able to plan.

The NatWest rate unless application has been made might have increased again. 

thank you, application is in and accepted, just waiting on the survey but completely unable to choose between fixed with natwest or variable with Hinkley & Rugby, it is hard to accept £100 more a month with natwest (while sitting here with the heating off :-) ) but it wouldnt break us, the rise in interest rates might I think

Is your husband aware that with variable, there are 2 more increases in 2022 next is on the 3rd of November 2022 and 15th December 2022.

The NatWest application/offer will be valid for some months so some time to finalise decision. 

Thank you, I'm trying to find an estimate for predictions of interest rates for mid-way through next year and I am coming up with 6% so I think we need to do the sums to get an idea of how high the discount mortgage could potentially go, thank you

dander

I'm in a similar position - same kind of mortgage length but I have a bit less outstanding. I don't know how close to budget you are with current payments, but the differences you illustrate in your post between mortgage rates are really quite small in £. And with every payment you make the balance you pay interest on is shrinking. Say you took the 5 year fix now, when that ends you'll only have a balance of about £40k, with that balance reducing by about £10k every year. Your exposure to the interest rate rises becomes lower and lower. I think a lot of the decision at your stage of a mortgage revolves around how much you value certainty - the fix gives you a firm price you know you'll be paying for the next 5. The discount price can change - £925 now, but could be totally different next month. TBH my feeling is if you are worried and overwhelmed now, fixing for certainty is better. But also, try not to worry when you see these news stories about payments going up by thousands - those people have way bigger loans than you.

joanna3293

dander said:

I'm in a similar position - same kind of mortgage length but I have a bit less outstanding. I don't know how close to budget you are with current payments, but the differences you illustrate in your post between mortgage rates are really quite small in £. And with every payment you make the balance you pay interest on is shrinking. Say you took the 5 year fix now, when that ends you'll only have a balance of about £40k, with that balance reducing by about £10k every year. Your exposure to the interest rate rises becomes lower and lower. I think a lot of the decision at your stage of a mortgage revolves around how much you value certainty - the fix gives you a firm price you know you'll be paying for the next 5. The discount price can change - £925 now, but could be totally different next month. TBH my feeling is if you are worried and overwhelmed now, fixing for certainty is better. But also, try not to worry when you see these news stories about payments going up by thousands - those people have way bigger loans than you.

Thank you, that has helped a lot, I have actually been fixating on those news stories and you've put it into perspective for me, I think because I've seen my parents go through this and lose their house/business in a recession it has made me react perhaps more than I should!  

raf300

That rate of just over 4% is really good . We are in a similar position but have less outstanding balance. 

We just booked a rate of 5.3% fixed for 2yr  instead of riding it out in a tracker. It was the E best rate our lender gives and all other lenders are nearer 6%. 

 

Also we fixe for 2 years as we need to move but will hold off   till next summer to see what happens with house prices. So our ERC will be less if we need to exit . 

It is all a bit chaotic for alot of people to make the right choice, that is why markets and humans like stability