Will 5yr fixed rates improve if interest -0.25% next week?

dweeby

Hi,

We've had an offer accepted on the house of our dreams, and are keen to get everything in motion. We have a good mortgage quote, and are about to proceed.

However, the MPC meets on 7/2/08 (week on Thursday) to review the interest rate. My feeling (after the rate holding last month, and the huge drop in the US) is that it's likely to drop by 0.25%.

We're getting a 5yr fixed rate, and the current quote is 5.22%. Are the fixed rate mortgages likely to reduce the interest rate if the BOE goes -0.25%? Would this happen "immediately"? We don't want to delay the purchase, or loose the mortgage deal that we think is good.

Ta!

moneymare

Who is your 5 year fix with at 5.22%

kingkano

Probably not. Fixed rates are based more on money market conditions and the availability of money to banks. Even if it did it certainly wouldnt be immediately. It takes a few weeks to even filter through to variable rates. Then the banks need to secure a new round of funding at lower rates for fixed deals....

5.22 is pretty amazing anyways.

ds1980

cumberland bs i think.

first direct 4.99 with only £299 arrangment some good deals to be had out there now. Credit crunch is easing it seems. deloitte think 4% by end of 2009 will we see 10 year fixes at 4% soon? I think so.

lisyloo

Hello,

My feeling is also that fixed rates won't change much.
Current expectations (including a cut in Feb) are already "priced in", so it won't make any difference.

I suggest you take a look at First Direct.
They have a 5 year fixed rate at 4.99%.
The fees are fairly low and it's offset as well, so that seems pretty unbeatable to me.

If you find anything better then please let us know.

lisyloo

Wow, that was good timing !!

deloitte think 4% by end of 2009

Can someone explain to me how the BOE are going to drop interest rates when inflation will be raging (20% increase in gas bills etc.).

At the moment I think the likes of Deloitte are wrong.
I know they are the professionals but I jsut can't see it at the moment.
The BOE have said that they will target inflation so let's see if they hold fast.

Anyway I can't really see how the OP can wait very long as they need a mortgage now, so there isn't really much scope for waiting more than a few weeks at the most.

dweeby

ds1980 wrote: »

cumberland bs i think.

It is click here.

We're not first time buyers, but have that deal because we're currently living in rented.

So, its a 5 year fixed for £87k at 5.22%. Yes, I agree that the First Direct is a good deal, I think its the cheapest in the country (as far as I can see). Don't know why I'm hesitant about it!??

We live in Cumbria, and have local offices. Worth paying more? probably not!

dimbo61

hi andy 5.22% fixed for 5 years is very good in the current market
check out first direct 4.99% fixed offset 5 year deal ( lending conditions may be 75% LTV )????
You would have 5 years security of knowing what your mortgage payment is each month and no nasty remortgaging fees in 2 years time !!
A new house is great BUT the costs ie mortgage fees, solicitor, stamp duty, and dont forget new furniture, phone/ broadband, fridge,bed,repairs,etc can
make it very expensive for the first year or two. GOOD LUCK

adr0ck

lisyloo wrote: »

Can someone explain to me how the BOE are going to drop interest rates when inflation will be raging (20% increase in gas bills etc.).

.

bank of england are simply going to ignore inflationary pressures.......or change the way inflation is calculated so it looks like their not ignoring inflationary pressures

we will soon find out how independent the bank of england is!!!!!!

dweeby

ds1980 wrote: »

first direct 4.99 with only £299 arrangment.

Copied from First Directs website:

"arrangement fee £299 / fixed offset Mortgage booking fee of £299"

- so £598 (although the Cumberland want £795!).

ds1980

I was trying to show how things were getting better. remortgaged lately and was getting deals with £3k arrangemnet fees!!!!!!!!

was cheaper me being on the svr!!!

yeh but no one says taht oil has dropped 20% and we're still paying 105 a litre of petrol!

swings and roundabouts. No one knows what theyll be and who cares if i can fix all my mortgages at 5% for life i couldn't giive a monkeys whetehr interest rates were 1% because your never going to get much better than that.

when ir were at 3.5 think best 10 year was about 4% yeh when your talking about million pounds 1% is a lot over time but your never going to go under if your paying 1% over 5-6 maybe!

op id go with first direct and over pay to the hilt as its offset. please check i havnt!! pay as much of it off in 5 years and then you shouldn't worry as you could / should have only half your mortgage left by then.

good luck