New fixed rate or variable? 31 October 2022 at 11:43AM in Mortgages & endowments 24 replies 2.4K views

jonnypb

mjstokes85 said:

I fixed with accord for 5 years at 4.58%, tracker was 0.39% above base rate for 2 years, surely that will end up higher than the fix due to the impending rate rises this week and again in future. My thoughts were just fix it for 5 and not have to mess about again in 2 years stressing over what is best. It's only £50 a month more than I'm paying now and my payrises over the next 5 years will cover that easily.

If you're comfortable with a 5 year fix and can afford it then that's the right decision for yourself as it gives you the stability of the payments staying the same.  Also a 5 year fix of 4.58% is a lot better than what the forecasts were before xmas when 6% was being talked about.

No one knows what will happen, but it does look like rates aren't going to peak like they were expecting which is why I went for the 2 year 0.39% tracker, with the hope that the forecasts are correct that the interest rate won't go above 4.5%, then slowly come down at the end of the year, or start of 2024.  Fingers crossed we might see 3.5% fixed mortgage deals in 18 months time.

greyjoy70

I know that we don't have a crystal ball but if rates rise tomorrow by 0.5% do we think this will affect current fixed deals? Not sure whether to lock in now or wait? 

greyjoy70

No one knows what will happen, but it does look like rates aren't going to peak like they were expecting which is why I went for the 2 year 0.39% tracker, with the hope that the forecasts are correct that the interest rate won't go above 4.5%, then slowly come down at the end of the year, or start of 2024.  Fingers crossed we might see 3.5% fixed mortgage deals in 18 months time.

I was tempted by a 2 yr tracker option (0.69%) but the £995 fee wipes out any saving in potentially lower interest.

jonnypb

greyjoy70 said:

I know that we don't have a crystal ball but if rates rise tomorrow by 0.5% do we think this will affect current fixed deals? Not sure whether to lock in now or wait? 

Mortgage advisors who I've spoken to have said that the current fixed rates have already factored in the expected interest rate rise in the coming months, only time will tell!