mortgage / interest rates

goodintentions_3

Hi everyone
I am new on here so first of all hello!

My fixed rate mortgage deal expires on 31st Jan 08, and i was wondering what people's feelings were about what interest rates will do. I like the security of a fixed rate as we dont have a lot of money in case rates go up, but I wonder whether I will be paying over the odds if interest rates drop?

Any advice greatly appreciated, money is tight now and I want to make the most of this opportunity to revise my mortgage payments.

Thanks
x

James187

BoE base rate is predicted to fall to 5.00% by quarter 3 2008 staying at that level for the remainder of the year.

If money is tight though, it may be better taking a fixed rate as you'll have certainty when it comes to budgeting - there's some pretty good fixed rates available at the moment too.

dwsjarcmcd

The perceived wisdom is that rates will drop over 2008. To what is anybodies guess, however, these potential drops are factored into the prices of fixed rate loans. You also have to consider over what length of time you want a deal over. With longer term fixes, you may lose in the first couple of years and gain it back as the cycle turns. With trackers, you may gain in the short term but lose it in the longer term. For short term deals, the fees can be large and you need to pay this over again in a couple of years.
In reality, no-one can really answer your question with any degree of certainty and it is really down to you to decide what is best in your own personal circumstances.
Speak to your current lender to see what range of product transfer products they have as a starting point.

David

goodintentions_3

thanks both, I have spoken to my lender and they can offer me a fixed rate of 6.29% for a 2, 3 or 5 year period, which just seemed a bit high but I have no real basis for comparison. i have an appointment with another lender next week to see if they can beat that offer, i guess i'll just have to see what happens.

thanks for taking the time to reply
x

dwsjarcmcd

At that rate, I would guess that it is fee free. Make sure you consider the level of fees with whoever you look at. Good luck.

David

aah

try a comparison site - just, as david says, don't forget the fees - some can be £2k!

moneysupermarket or lcplc are good

dwsjarcmcd

Another good one, and probably the most 'unbiased' is www.moneyfacts.co.uk

David