Should I fix?

luke1ok

Hi all,

Our 2 year fixed rate is up in March which is currently 3.49%. Back in November we spoke to our mortgage broker and he advised to go onto a 2 year tracker which at the time was 1.49% + 2.5% BoE Base Rate so basically 3.99%. Fixed rates were above 6% then so out of the question. 

As the BoE base rate has go on up to 3.5% it means our current tracker deal would begin at 4.99% so quite a jump, and most likely rise with predictions saying base rate will increase further this year.

We had another meeting with out broker earlier this week and he showed us some new products with better rates. 

We can go with Natwest or Nationwide on a 2 year fixed rate at 4.99% (so same as tracker but will be fixed) - or 5 year fixed at 4.63%.

We are very tempted to go with the 5 years fixed at 4.63% as that seems reasonable. Worth noting that we probably won't move during the next 5 years, but we will start a family hopefully. 

Do you think this is the right choice for us?

Thanks

celly5460

I doubt we will see anything less than 4% for a while so I'd personally fix for as long as possible at anything circa 4.5%. Like you, I've gone for a similar rate with Natwest for five years. Rates fell the day after our offer came through so we were able to get a product transfer (admin exercise) as completion is a few months away. I was tempted with a tracker too but the fall in rates saved us £150 a month. 

During my consultation with my broker, he mentioned that having fixed expenditure when you are thinking of starting a family will certainly help with budgeting all your outgoings. 

MFWannabe

If the 5 year fix is affordable then I’d go with that 

FashionHeart

luke1ok said:

Hi all,

Our 2 year fixed rate is up in March which is currently 3.49%. Back in November we spoke to our mortgage broker and he advised to go onto a 2 year tracker which at the time was 1.49% + 2.5% BoE Base Rate so basically 3.99%. Fixed rates were above 6% then so out of the question. 

As the BoE base rate has go on up to 3.5% it means our current tracker deal would begin at 4.99% so quite a jump, and most likely rise with predictions saying base rate will increase further this year.

We had another meeting with out broker earlier this week and he showed us some new products with better rates. 

We can go with Natwest or Nationwide on a 2 year fixed rate at 4.99% (so same as tracker but will be fixed) - or 5 year fixed at 4.63%.

We are very tempted to go with the 5 years fixed at 4.63% as that seems reasonable. Worth noting that we probably won't move during the next 5 years, but we will start a family hopefully. 

Do you think this is the right choice for us?

Thanks

If you're not thinking of moving anytime soon, then I'd go for 5 years fixed.
The current market is extremely volatile and plus 2 years go really fast (I'm nearing the end of my 2 years fixed now) and you have no way of knowing if things will calm down or not.

RelievedSheff

I would go with the 5 year fixed. 

BOE Interest rates are unlikely to be coming down substantially any time soon.

matt1983

Im quite surprised at how many on this forum are recommending going with 5 year fixes. Im not at all an expert and i suppose no one knows where the base rate will be in 2/3/4 years, but id lean more towards a tracker. 

Maybe im just being stupidly optimistic or being influenced by the fact interest rates were so low for most of my adult life. 

My 1.09% 2 year fix is ending in March and i was leaning massively towards a tracker, but now im not so sure 🤔 

mjstokes85

I am in the same boat, I can track with accord for 2 years at 3.89% which is 0.39% above base or fix for 5 years at 4.58%. I was thinking tracker but now I am thinking fixed as surely base rates will go to 4.5% and probably not move much? It's a very hard choice!