Crystal ball needed

N9eav

I need to remortgage. But should I plump for a fixed rate of around 4.3-4.5% or go with a tracker at about 4.74%.

The question is, are interest rates going to go UP or DOWN over the next 2 - 3 years?

What do you know?

zag2me

I got a tracker, simply because I beleave interest rates are on their way down. The arrangement fee was waived too which gave me more money to spend on things like a bed and a tv fyi i go the egg discount tracker

http://new.egg.com/visitor/0,,3_75370--View_1538,00.html

P.S. There is no crystal ball Choose the product that is suitable for your situation.

N9eav

That's the whole point. I can use any mortgage really, but it's a toss up whether to fix it and hope interest rates stay the same or don't go down by much, or track it if interest rates go down. I just wondered what the forcast was...... No one seems to know, although I was told that they should go down in line with euro rates??

zag2me

Interest rates are on their way down, the minutes from the last MPC meeting show 4 members wanting a cut and 5 members voting for a hold in rates. The fact that they are on their way down, is also indicated by the lower fixed rate products recently becoming available. Also ING cut its headline rate this month.

Conrad

N9eav wrote:

That's the whole point. I can use any mortgage really, but it's a toss up whether to fix it and hope interest rates stay the same or don't go down by much, or track it if interest rates go down. I just wondered what the forcast was...... No one seems to know, although I was told that they should go down in line with euro rates??

Fixed rates give u peace of mind so I tend to factor this in to any decisions.

Ok they might go down a little but the downside implications of a rate increase often outweigh any potential savings of a decrease.

I summary I tend to recommend people on a tightish budget and those with large mortgages go fixed.

No one knows where rates will go, I see retail inflation is increasing again so the MPC will see this as a reason to be hawkish. My gut feel - a decrease, but what do I know?

N9eav

Thanks. I think I will go fixed, short term and see what the markets are doing by then. At least my paymenst will stay roughly the same

GreenB_2

There are some good Fixed rates around at the moment (some arount the 4.25% rate). Its unlikely that a SVR will ever get that low - sure trackers and discounts may but my view is its better safe than sorry!

N9eav

I held out for the bank of England, before switching. I may have just saved £250 over the 2 years. I will have to move now even if there is another drop this year. But I think it may be a better time to switch. Any new offers out theer yet?

MortgageGenie

If you were going with a tracker product anyway then yesterday's move has made no different to you as a result of delaying your remortgage as you would have benefited even if you had applied 2 weeks ago.
With regards to fixed rates, we'll know more in the coming days/weeks... it depends if the swap rates start to price in a 3rd reduction.

swebber

Does anyone have a theory on how long it will take Banks and BS to drop there Fixed rate / Tracher deals if they are going to ?

Am like N9eav, can't hang about long or I will pay the dreaded SVR.