Renewal time again

daveaspy

oh this is a tough one after the big part of my mortgage being on sub 1% for the last 5 years, coming to an end at the end of the year 😔

I can lock in with my current provider from now and see how things goes over the next few months, still hard to know which one to pick though! Their best offers at the moment

2 year tracker 3.99% (base rate + 0.24%, 999 fee, no exit fee)

2 year fix 4.87% (no fee)

3 year fix 4.58% (999 fee)

5 year fix 4.78% (no fee)

I tend to like trackers, unless I can lock in a sub 1% rate 😂 Will the base rate go up significantly ??? I'm thinking no. Might fixes go up, quite possibly given borrowing costs. I don't think it obvious where things are going

Yorkie1

If you can reserve a product now and change it without penalty up to shortly before your current product's expiry date, you have nothing to lose by hedging your bets over the next few months to the end of the year.

The question of fee vs fee-free is a personal decision, and may depend at least in part on how much your outstanding balance is.

I've always fixed, so can't comment on that vs tracker!

RelievedSheff

We have always fixed and were lucky to get a 5 year fix at 4.04% earlier in the year but looking at your rates there I would be very tempted by the tracker.

Like you I can't see BOE rates going up more than 0.5% over the next couple of years so that would still work out cheaper than any of those fixed offerings.

poseidon1

https://forums.moneysavingexpert.com/discussion/6681881/renewal-time-again

Interested why you feel it is not obvious where the direction of travel is with regard to UK interest rates.

You will have hopefully noted there is a global sell off of government bonds across the world with UK gilts especially getting the sharp end of the stick.

The escalation of what is looking like a never ending middle east conflict with iran and resulting spiking in oil prices is already stoking UK inflation figures, with no respite in sight. The Bank of England has very little in its armoury to control imported inflation other than pulling on the base rate lever. International traders are pricing in a quarter point rise in the BOE base rate as a result of these factors - see below

https://www.morningstar.com/news/dow-jones/202609021733/uk-government-bond-yields-hit-multiyear-highs-as-global-and-domestic-pressures-add-up

UK mortgages are priced in accordance with swap rates which in turn are directly pinned to UK gilt yields. As those yields rise ( which is happening as we speak ) so do the swap rates and the cost at which mortgage companies secure funding for domestic mortgages. To protect their profit margins lenders will inevitably pass those increases onto borrowers. In my view it is not a question of if they will do this, but when. Hot off the press see below -

https://www.theguardian.com/money/2026/sep/03/uk-mortgage-borrowers-brace-for-rate-jump-global-bond-sell-off

In short you just might come to regret not fixing at current levels, I certainly see no reason to be optimistic at the present time.

daveaspy

all good points 😂

I thought I'd read that the BOE had accepted they couldn't really use interest rates to control inflation due to high energy costs, and that seems to be the biggest driver at the moment.

Higher swap rates will cause mortgage lenders to increase fixed rates yes, and also increase that extra % on top of base rate trackers, but with the economy hardly booming how likely is it the base rate itself will go up considerably (say more than 0.75%)?

Interesting times, will be watching closely

poseidon1

This website is worth keeping an eye on periodically to get a sense of where the mortgage market is going.

https://hoa.org.uk/advice/guides-for-homeowners/for-owners/mortgage-rate-forecast/

The next domestic key event that may result in gilt yields worsening from current elevated levels, will be the international markets reactions to Andy Burnham's first budget announcement next month.

If he cannot placate or reassure the markets of the governments plans for the economy and management of its debt, gilt yields could spike even more with knock on effect on swap rates.

Tobytobbins

My own mortgage is due to end in January.

I've just signed up for the 3 year fixed, no fee 4.8% with Santander (current provider).

It's really a place holder, in the hope that if it does increase, I've something in place.

I've not much of a mortgage, so it'd take a large increase in interest to have a significant impact on my monthly payment.