What would you do

fewcloudy

tony863 said:

For what it's worth, I think the rates will remain high for 5yrs, but I don't expect them to be high going into the second half of our period. The key thing you've got to ask yourself is whether you can afford the remortgage at the 5yr point (or 2 or 3 if you're feeling brave) if the base rate hits 6.5% and lender rates are 7.5%.

It always comes down to this bit really, crystal ball stuff as ever.
IMO you just have to do the reasearch as best you can, to make a well-informed realistic choice. Sounds like you've done this so you're good.
When we moved to final house, big new mortgage and rates were similar to now, I convinced myself that they wouldn't rise much more, maybe stay the same, but most likely would drop, and I took a tracker.
Best friend in similar situation took a 10 yr fix. Either of us could've been right but it obvs worked out better for me. He ended up about 7% higher than he should've been and IIRC he eventually paid a huge ERC to get out.
No one knows what rates will be over coming years and some on here will be spectatcularly wrong, and some will be spot on.
It was ever thus.
Good luck.

downs523

We are with NatWest and our current deal ends 31st December and we have just remortgaged to their 6.24% 2 yr fix with no fee. Reason being is that if rates drop between now and December then I can reapply without paying the £995 fee. Over the 2yr period it was around £300 cheaper going the no fee v fee route. Its adding £300 a month to our mortgage which will be interesting. I did consider 5/10yr deals but the one we’re on now was a 5yr fix and we missed out on lots of sub 2% deals. I think rates will increase but hoping they settle and reduce in the next 2.5yrs. No one can know for sure, it’s a gamble 😂

TheAble

Discount variable rates don't seem to get much of a mention these days but they'd make some appeal to me. I see you can get 4.3% for a 2 year discount variable at the current time. Can't help but think rates are getting a bit overheated so wouldn't want to lock myself into a fix for too long.

tony863

downs523 said:

We are with NatWest and our current deal ends 31st December and we have just remortgaged to their 6.24% 2 yr fix with no fee. Reason being is that if rates drop between now and December then I can reapply without paying the £995 fee. Over the 2yr period it was around £300 cheaper going the no fee v fee route. Its adding £300 a month to our mortgage which will be interesting. I did consider 5/10yr deals but the one we’re on now was a 5yr fix and we missed out on lots of sub 2% deals. I think rates will increase but hoping they settle and reduce in the next 2.5yrs. No one can know for sure, it’s a gamble 😂

I'd seriously map this out in where you see the reduction happening and whether it coincides with your 2yr prediction. I looked in good detail and haven't read a single piece of information that says the rates will decrease to sub 3% within the next 3yrs. Most are saying 4% would be more realistic, but there are different views on when it will be achieved. The majority of read suggest the BoE will be in no rush to lower the rate and once stabilised, they will reduce it 0.25% every 3 or 4 months.

The Gov already said they want inflation to be between 2 and 4% but we are +8% and nowhere near where we want it to be. Let's say it creeps up and slowly to between 6 and 6.5% by mid next year. It might take 1yr to reduce the rate by 1% which means the BoE base rate would be 4.5% by the time you are renewing. Lender rates would be around 5.5%+, so maybe it's worth 
looking at a 5yr fixed for 5.25%.

Work out how much the extra is costing you per month and multiply by the 5yrs. That's what made me realise it was a significant sum despite it looking like a small increase when you just look at the percentage figures. 

housebuyer143

TheAble said:

Discount variable rates don't seem to get much of a mention these days but they'd make some appeal to me. I see you can get 4.3% for a 2 year discount variable at the current time. Can't help but think rates are getting a bit overheated so wouldn't want to lock myself into a fix for too long.

The only problem with discounts is they are so unpredictable. The lenders can increase their SVR whenever they want and don't necessarily reduce it with base rate.